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Title: Post Keynesian Dynamic Stochastic General Equilibrium Theory

Author(s): Roger E A Farmer

Publication Date: January 2017

Keyword(s): Dynamic Stochastic General Equilibrium Theory and Post Keynesian Economics

Programme Area(s): Monetary Economics and Fluctuations

Abstract: This paper explains the connection between ideas developed in my recent books and papers and those of economists who self-identify as Post Keynesians. My own work is both neoclassical and "old Keynesian". Much of my published work assumes that people have rational expectations and that "animal spirits" should be modeled as a new fundamental. I adopt a general equilibrium framework to model the macroeconomy. But although I write from a neo-classical tradition the themes I explore in my published writing have much in common with heterodox economics. This paper explains the common elements between these seemingly disparate traditions. I make the case for unity between Post-Keynesian and General Equilibrium Theory under the banner of Post-Keynesian Dynamic Stochastic General Equilibrium Theory.

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Bibliographic Reference

Farmer, R. 2017. 'Post Keynesian Dynamic Stochastic General Equilibrium Theory'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=11807