Samuelson and the Keynes/Post Keynesian Revolution

AbstractThis chapter appraises the many versions of Keynes — Old Neoclassical, New Keynesians, Old Classical or New Classical Theorists — as adopting Keynesian general theory as their basic framework. It considers a different stream of post-Keynesian economics. The Samuelson brand is also aligned with the works of James Tobin and Franco Modigliani, all of which address how changes in the money supply engineered by Federal Reserve policy have important effects upon the level of money, gross national product, real output and the price level. Samuelson enunciated three post-Keynesian propositions: 1) changes in thriftiness and the marginal propensity to consume can affect output, prices, and production; 2) an exogenous burst in investors' instinctive behavior has a systematic effect on GNP; and 3) an increase in public expenditure, or a cut in the tax rates, has a systematic effect on GNP.