The following is reproduced from "An Essay on Post-Keynesian Theory: A New Paradigm in Economics", Al Eichner and Jan Kregel's 1975 Journal of Economic Literature article. Of course, the table being a summary, all entries are highly stylized.
| Aspect | Post Keynesian Theory | Neoclassical Theory |
| Dynamic properties | Assumes pronounced cyclical pattern on top of a clearly discernible growth path | Either no growth, or steady-state expansion with market mechanisms assumed to preclude any but a temporary deviation from that growth path |
| Explanation of how income is distributed | Institutional factors determine a historical division of income between residual and non-residual shareholders, with changes in that distribution depending on changes in the growth rate | The distribution of income explained solely by variable factor inputs and the marginal productivity of those variable factor inputs |
| Amount of information assumed to be available | Only the past is known, the future is uncertain | Complete foresight exists as to all possible events |
| Conditions that must be met before the analysis is considered complete | Discretionary income must be equal to discretionary expenditures | All markets cleared with supply equal to demand in each of those markets |
| Microeconomic base | Imperfect markets with significant monopolistic elements | Perfect markets with all micro units operating as price takers |
| Purpose of the theory | To explain the real world as observed empirically | To demonstrate the social optimality if the real world were to resemble the model |
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2 comments:
IIRC, that article is reprinted in the original 1979 A Guide to Post-Keynesian Economics edited by Eichner, which one can still get for very little at Amazon, and is worth getting even if my memory doesn't serve.
That book does relate to that article, but it is not reprinted in it. The Guide is an attempt to present a more expanded introduction to Post Keynesian economics, hopefully creating a larger response than was created by the article.
I prefer the 1979 Guide to the 2001 New Guide. Maybe that is just me.
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