Money, Uncertainty and Time Presentation prepared for the “Keynes Seminar”, Robinson College, University of Cambridge, 24 th November 2009 By Giuseppe Fontana

Contents 1 Introduction: Money, Uncertainty and Time Part I: Keynes, the 'Classics' and the Modern Keynesian Dissent 2The Historical Development of Dissent in Keynesian Economics 3Methodology and Economic Theory in Keynes's General Theory Part II: From Rationality to Unemployment and the Monetary Circuit 4A Two-Dimensional Theory of Probability and Knowledge 5Uncertainty and Money Part III: Understanding Endogenous Money 6Hicks as An Early Precursor of Endogenous Money Theory 7Horizontalist and Structuralist Analyses of Endogenous Money 8A General Theory of Endogenous Money 2

Introduction Keynes and Keynesian Economics – Proposition 1: the Possibility of Involuntary Unemployment – Proposition 2: the Principle of Effective Demand – Proposition 3: the Principle of Policy Effectiveness The Changing Nature of the Keynesian Dissent – First Principles: Money, Uncertainty and Time – Theory plus Methodology 3

Keynes, the 'Classics' and the Modern Keynesian Dissent Chapter 2: The Historical Development of Dissent in Keynesian Economics – The Origins of Post Keynesian Economics – The Romantic Age: The Search for a Grand Theoretical System – The Age of Uncertainty: The Search for an Alternative Methodology 4

Keynes, the 'Classics' and the Modern Keynesian Dissent Chapter 3: Methodology and Economic Theory in Keynes's General Theory – Keynes’s Method: Chapter 18 of the General Theory – Keynes versus the ‘Classics’: Scope and Method of Economics – Mr Keynes and the ‘Classics’ in Prospect 5

From Rationality to Unemployment and the Monetary Circuit Chapter 4: A Two-Dimensional Theory of Probability and Knowledge – Probability Theory and Forms of Knowledge – On the Nature of Uncertainty – Paul Davidson and Non-ergodic / Monetary Post Keynesians on Uncertainty 6

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From Rationality to Unemployment and the Monetary Circuit Chapter 5: Uncertainty and Money – Uncertainty2, Money, and Involuntary Unemployment – Uncertainty1, Money, and the Production Process 8

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Understanding Endogenous Money Chapter 6: Hicks as an Early Precursor of Endogenous Money Theory – “Monetary theory is in ‘history’ ”: An Analytical and Historical Question – Single Period Theory vs. Continuation Theory – Time and Method in Endogenous Money Theory 11

Understanding Endogenous Money Chapter 7: Horizontalist and Structuralist Analyses of Endogenous Money – The Horizontalist Analysis of Endogenous Money: Loans Create Deposits > Deposits Make Reserves – The Structuralist Analysis of Endogenous Money Liquidity preference of the household sector Liquidity preference of the business sector Liquidity preference of the commercial bank sector 12

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Understanding Endogenous Money Chapter 8: A General Theory of Endogenous Money – Controversial Issues The market for monetary reserves The credit market The financial markets – A Single Period-Continuation Interpretation of the Controversial Issues 15

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