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Post-Keynesian Economics: New Foundations: Second Edition
Students in economics are ever more distressed by the disconnect between mainstream economics and the real world. This book shows how post-Keynesian economics constitutes a coherent heterodox alternative, based on realistic assumptions and the integration of the financial and real sides of the economy, with an emphasis on the many paradoxes that arise in a truly macroeconomic analysis.
The book is a considerably revised and updated version of the widely used and frequently cited 2014 edition. It provides a comprehensive account of post-Keynesian theory and policy. Topics covered include its methodological foundations, consumer theory and choice under fundamental uncertainty, firms and pricing, money and credit, effective demand and employment, growth theory, open-economy issues, inflation theory. It also links with ecological economics.
Scholars of economics, particularly post-Keynesian and heterodox economists, will find this comprehensive look at the field a necessary addition to their libraries, while students and instructors will find it a perfect text for any class on post-Keynesian economics.
The book is a considerably revised and updated version of the widely used and frequently cited 2014 edition. It provides a comprehensive account of post-Keynesian theory and policy. Topics covered include its methodological foundations, consumer theory and choice under fundamental uncertainty, firms and pricing, money and credit, effective demand and employment, growth theory, open-economy issues, inflation theory. It also links with ecological economics.
Scholars of economics, particularly post-Keynesian and heterodox economists, will find this comprehensive look at the field a necessary addition to their libraries, while students and instructors will find it a perfect text for any class on post-Keynesian economics.
744 pages, Hardcover
Published May 4, 2022
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About the author
Marc Lavoie
30 books13 followersProfessor of Economics at the Department of Economics, Univesity of Ottawa.
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Displaying 1 - 2 of 2 reviews
November 24, 2023
As of writing this, I have not done a full read of this book, as I skipped the section where Lavoie speaks of uncertainty. However it would be worth noting that is views on the topic are still scattered throughout the textbook.
To start, Post-Keynesianism is not a homogenous category of economics, there are 5 main groups that represent Post-Keynesian theory.
1. Fundamentalist
2. Institutionalists
3. Sraffians (otherwise known as Neo-Ricardians)
4. Kaleckians
5. Kaldorians
It would be worth noting that there are many other schools which share similarities to Post-Keynesianism, such as the French Regulation School, Marxian economics (as they're both apart of the heterodox, although it's worth noting that Marxian economics can sometimes be quite contradictory of PK theory) On top of that, there is MMT, Public Economics, and Minskyans. All MMTers are Post-Keynesian, not all Post-Keynesians are MMTers, I do believe that MMT may fail in ways that PK would not.
To start with what each of these terms mean; Fundamentalist are mainly concerned with econometrics, and uncertainty regarding the future. Both of these have been heavily criticized by those who hold affinity towards the Neoclassical school. Neoclassicals have disregarded the use of econometrics in the past, on top of that they believe that uncertainty absolves into risk. However, fundamentalists have incorporated a view of uncertainty which some would regard as an extension of Keynes view of uncertainty. Fundamentalists are very important for extending uncertainty into an ontological outlook.
Institutionalists - This group is mainly dedicated to speculating how Keynes would view microeconomics. However, in my opinion their biggest contribution is that of meta-regression analysis, which proves that employment is not a function of wages.
Sraffians - This group is essentially just your Post-Marxists. They dedicate their study to understanding the various modes of production and how that relates to the state of the political economy. Marx after Sraffa is a great book dedicated to Neo-Ricardian economics.
Kaleckians - This group is mainly comprised of those who share a more omni approach, Kalecki himself was very closely associated to Marxism. The belief that all Kaleckians share is the notion that utilization capacity sits at a fixed rate.
Kaldorians - It's widely accepted that Nicholas Kaldor and Joan Robinson began the Post-Keynesian school, as they were the first members of the Cambridge school. Where as Kaleckians are closely associated with Marxism, Kaldorians are quite disassociated from it. Joan Robinson herself was a critic of Marx, and many of his contemporaries. However, she was a very sympathetic critic at that, Joan Robinson was known for having some pretty nasty feuds which those she disagreed with. Enough of the history, what does this group believe exactly? Kaldorians are mainly concerned with the study of disequilibrium economics, and have developed a quite sympathetic approach towards it.
I'm only going to give this four stars, I believe it's a great introduction to PK theory, that is if you've had experience with a masters degree style of economics. This textbook includes many mathematical formulas and high levels of abstraction, it can sometimes be easy to get lost in Lavoie's abstractions.
Reading list for anyone who has further interest in PK theory after finishing this textbook:
Hyman Minksy - Stabilizing an unstable economy
Hyman Minsky - John Maynard Keynes
Wynne Godley - Monetary Economics
Wynne Godley & Marc Lavoie - Stock Flow Consistent Modeling
Ian Steedman - Marx after Sraffa
Steve Keen - Debunking Economics
Stephanie Kelton - Deficit Myth
Anwar Shaikh - Capitalism
To start, Post-Keynesianism is not a homogenous category of economics, there are 5 main groups that represent Post-Keynesian theory.
1. Fundamentalist
2. Institutionalists
3. Sraffians (otherwise known as Neo-Ricardians)
4. Kaleckians
5. Kaldorians
It would be worth noting that there are many other schools which share similarities to Post-Keynesianism, such as the French Regulation School, Marxian economics (as they're both apart of the heterodox, although it's worth noting that Marxian economics can sometimes be quite contradictory of PK theory) On top of that, there is MMT, Public Economics, and Minskyans. All MMTers are Post-Keynesian, not all Post-Keynesians are MMTers, I do believe that MMT may fail in ways that PK would not.
To start with what each of these terms mean; Fundamentalist are mainly concerned with econometrics, and uncertainty regarding the future. Both of these have been heavily criticized by those who hold affinity towards the Neoclassical school. Neoclassicals have disregarded the use of econometrics in the past, on top of that they believe that uncertainty absolves into risk. However, fundamentalists have incorporated a view of uncertainty which some would regard as an extension of Keynes view of uncertainty. Fundamentalists are very important for extending uncertainty into an ontological outlook.
Institutionalists - This group is mainly dedicated to speculating how Keynes would view microeconomics. However, in my opinion their biggest contribution is that of meta-regression analysis, which proves that employment is not a function of wages.
Sraffians - This group is essentially just your Post-Marxists. They dedicate their study to understanding the various modes of production and how that relates to the state of the political economy. Marx after Sraffa is a great book dedicated to Neo-Ricardian economics.
Kaleckians - This group is mainly comprised of those who share a more omni approach, Kalecki himself was very closely associated to Marxism. The belief that all Kaleckians share is the notion that utilization capacity sits at a fixed rate.
Kaldorians - It's widely accepted that Nicholas Kaldor and Joan Robinson began the Post-Keynesian school, as they were the first members of the Cambridge school. Where as Kaleckians are closely associated with Marxism, Kaldorians are quite disassociated from it. Joan Robinson herself was a critic of Marx, and many of his contemporaries. However, she was a very sympathetic critic at that, Joan Robinson was known for having some pretty nasty feuds which those she disagreed with. Enough of the history, what does this group believe exactly? Kaldorians are mainly concerned with the study of disequilibrium economics, and have developed a quite sympathetic approach towards it.
I'm only going to give this four stars, I believe it's a great introduction to PK theory, that is if you've had experience with a masters degree style of economics. This textbook includes many mathematical formulas and high levels of abstraction, it can sometimes be easy to get lost in Lavoie's abstractions.
Reading list for anyone who has further interest in PK theory after finishing this textbook:
Hyman Minksy - Stabilizing an unstable economy
Hyman Minsky - John Maynard Keynes
Wynne Godley - Monetary Economics
Wynne Godley & Marc Lavoie - Stock Flow Consistent Modeling
Ian Steedman - Marx after Sraffa
Steve Keen - Debunking Economics
Stephanie Kelton - Deficit Myth
Anwar Shaikh - Capitalism
October 8, 2025
Easily the best intermediate book on post-Keynesian theory, I have read most chapters in full length, and nothing disappoints the reader. I suggest brushing up on neoclassical assumptions before reading to gain a comprehensive understanding of the ongoing debates and economic theory of post-Keynesian economics.
Displaying 1 - 2 of 2 reviews