An Encyclopedia of Keynesian Economics (review)

Since the 1970s, John Maynard Keynes and Keynesian economics have had a shadowy existence among academic economists. After the long bout of stagflation and the rise of monetarism and rational expectations, Keynesianism was pronounced dead, over and over again. This was not the full story, of course, for great Keynesian economists such as James Tobin and Robert Solow were to win their Nobel prizes in the 1980s, and large numbers of economists still rallied around various Keynesian banners, such as post-Keynesianism. And in the 1990s there has even been a movement among dissatisfied macroeconomists toward a newly evolving school called New Keynesianism. Thus a more accurate picture would not be that Keynesianism had died, but that it had been subject to the usual vicissitudes of old age experienced by all great ideas. They come, they conquer, and then they get sent to the shop to get overhauled.

This easy-to-read collection edited by Tom Cate, together with associate editors Geoff Harcourt and David Colander, tells the whole story. Filled with short, well-written pieces, the encyclopedia covers the names and ideas that preceded Keynes, that carried his work to the center of the profession, and that eventually supplanted him there. Thus, we read about Alfred Marshall (“this great economist and awful person” [279]), A. C. Pigou, and Francis Edgeworth; about James Meade, Lorie Tarshis, and Joan Robinson; and about Milton Friedman, Karl Brunner, and Robert Lucas. There are excellent and unexpected articles on the Austrian school, the Lausanne school, and the Ricardo effect. There are well-done pieces on all the basic theoretical models at the heart of Keynesianism: the consumption function, the multiplier and accelerator, the IS/LM model, and so forth. The entries on new classical economics and the Phillips curve go a long way toward explaining how Keynesianism was replaced at the center of mainstream macroeconomics in the 1970s and 1980s.

To be sure, one could quibble with some of the pieces and with some of the omissions. For instance, the entry on Hubert Henderson never really gets to the point that after their early collaboration, Henderson went sour on Keynes and his work. Likewise, Robert Skidelsky is not up to his usual standards of scholarly care in his piece on the effects of G. E. Moore and Edmund Burke on Keynes’s thought. And while Don Patinkin’s interpretations could drive some people to distraction, it is hard to imagine not including him as a major developer and interpreter of Keynes’s ideas.

But these are minor flaws in a volume that has been well put together. The editors deserve special praise for letting each contributor tell his own story. Those who oppose Keynes’s ideas are just as well represented as those who carry the torch for him. This evenhandedness helps to ensure a volume that is truly representative and that will allow its users to get a full picture of the life and times of Keynesian economics.