On Money, Method and Keynes: Selected Essays - Victoria Chick
On Money, Method and Keynes: Selected Essays - Victoria Chick
A Monetary Theory of Production
Victoria Chick's book, "On Money, Method and Keynes: Selected Essays," is a collection of her most important writings on monetary theory, methodology, and the work of John Maynard Keynes. In this book, Chick argues that money is not a neutral veil that can be ignored in economic analysis, but rather plays a central role in the determination of output, employment, and prices. She also critiques the mainstream approach to economics, which she argues is based on unrealistic assumptions and does not adequately take into account the role of money.
The Importance of Money
Chick begins by arguing that money is not simply a medium of exchange, but also a store of value and a unit of account. This means that money has a real impact on the economy, and cannot be ignored in economic analysis. For example, changes in the money supply can affect the level of interest rates, which in turn can affect investment and consumption. Similarly, changes in the exchange rate can affect the competitiveness of domestic firms and the prices of imported goods.
The Flaws of Mainstream Economics
Chick argues that the mainstream approach to economics is based on a number of unrealistic assumptions, such as the assumption that markets are always in equilibrium and that prices are flexible. These assumptions lead to models that are not able to accurately predict the behavior of the economy. For example, the mainstream models predicted that the 2008 financial crisis would not happen, and they have been unable to explain why the economy has been so slow to recover.
A Keynesian Alternative
Chick argues that a Keynesian approach to economics is more realistic and accurate than the mainstream approach. Keynesian economics takes into account the role of money and the importance of uncertainty in economic decision-making. This allows Keynesian models to better predict the behavior of the economy and to provide more effective policy recommendations.
Conclusion
Chick's book is a valuable contribution to the literature on monetary theory, methodology, and Keynesian economics. It is a must-read for anyone who wants to understand the role of money in the economy and the importance of Keynesian economics.
Why You Should Buy This Book
If you are interested in learning more about monetary theory, methodology, and Keynesian economics, then I highly recommend that you buy this book. It is a well-written and thought-provoking book that will challenge your thinking about the economy. I believe that this book is essential reading for anyone who wants to understand the world we live in.