Day 1 – Talk 2
After our Introduction to Post-Keynesianism from Engelbert Stockhammer we were given a talk by Ozlem Onaran, from Greenwich University, on “Aggregate demand, income distribution and unemployment”.
She begins by adding to Engelbert’s introduction, highlighting that fundamental uncertainty can lead to path dependency – that is decisions made today (as a result of fundamental uncertainty) will have knock-on effects into the future. Post-Keynesians believe that full-employment is a special scenario, unlike neo-classicalists who believe that full-employment is the natural equilibrium and deviations are temporary and as a result of external shocks.
The determinants of investment are reminded as: capacity utilisation (how much of existing machinery is being used), credit availability, animal spirits, technological opportunities (after WWII there were many new technologies – partially discovered/created through military efforts – which helped aid the post-war boom as firms rushed to invest in these new technologies to make profit from them) and future profitability. [...]