Davidson And Eatwell On Current Events

This post points out some recent interventions by two leading economists in schools of thought in which I am interested.

Paul Davidson is the leader of American Post Keynesians and the editor of the Journal of Post Keynesian Economics. He argues that Sraffa's economics is not compatible with Keynes insofar as it is not set in historical time. And he advocates for the economics of Keynes over Sraffa.

His recent article "Crude Oil Prices: 'Market Fundamentals' or Speculation?" is available in the Heterodox Economics Newsletter (Issue 63, 12 June 2008). Davidson argues that "the absence of any excess supply adjustment is not ... evidence of the lack of a speculative force" driving current high oil prices.

John Eatwell, or Lord Eatwell, has contributed to attempting to synthesize the ideas of Keynes and Sraffa. I am thinking the 1983 book, Keynes's Economics and the Theory of Value and Distribution, which Eatwell co-edited with Murray Milgate. He also wrote, with Carlo Panico, the New Palgrave entry on Sraffa and has influenced my understanding on how Sraffa's standard commodity can be used to understand Marx.

In a 3 July letter in the Financial Times, Eatwell argues that regulators of financial institutions should monitor the details of the systematic risks which firms are taking on. In a 17 July comment, also in the Financial Times, Eatwell and Avinash Persaud comment on Fannie Mae and Freddie Mac and argue that markets with diverse players are thicker and more liquid.