Essays in Honour of Paul Davidson, 2 vols.

Author:Lavoie, Marc

These two books constitute a tribute to a most productive scholar, Paul Davidson, the long-time editor of the Journal of Post Keynesian Economics, who celebrated his 65th birthday a couple of years ago. The Festschrift was organized by Philip Arestis, himself quite a productive scholar, who has recently edited a number of books. Altogether, besides the introduction to each volume, which features a short biography of Paul Davidson and summaries of each paper, there are 22 essays, 11 in each volume. Some essays, about half a dozen, mostly to be found in the first volume, deal explicitly with what some authors have called Davidsonian economics; many essays deal with political economy or economic policy; a few essays seem to be unrelated to Davidson's work, and I will mainly skip those here.

Most of the essays in the first volume deal with monetary economics. Sheila Dow, Fernando Cardim de Carvalho, and Gary Dymski all explore some aspects of Davidson's view of the monetary production economy, such as the bond between uncertainty and money, the relevance of the finance motive, and the role of money as a time machine. Peter Howells synthesizes in a single article several of the questions he has been dealing with in various recent papers, in particular the link between endogenous money and the demand for credit for speculative purposes as well as the connection between the supply of credit and the demand for money balances. Philip Arestis and Malcolm Sawyer have an excellent critique of the European monetary union, to be built on an independent European system of central banks, as endorsed in the Maastricht Accord. Sawyer has a second paper, single-authored, on money and interest rates, a topic that he first addressed when writing his book on Kalecki. While surveying the links between Kaleckian and Post Keynesian monetary theory, Sawyer makes a number of controversial statements, such as when he argues that "there is no simple causal linkage between savings and investment" [p. 52], a statement that got the late Tom Asimakopulos embroiled in a long series of comments and replies. Sawyer also claims that "banks may be reluctant to extend further loans" when "they are fully loaned up" [p. 59]. Finally he asserts that the "horizontalist" position, as put forth by Moore or Kaldor, jettisons, "two insights gained from Kalecki and Keynes, namely the principle of increasing risk and the notion of liquidity preference" [p. 61], a claim that I think I have...

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