Keynesian Behavioral Macroeconomics

Theodore Koutsobinas

• Publisher: Academic Press
• Year: 2026
• Topic: Economics
• eBook ISBN:
  9780443247538
• Subtopic: Macroeconomics
• Index: Economics

Keynesian Behavioral Macroeconomics analyzes Keynes's landmark contributions in behavioral economics and develops a new and fresh genre of macroeconomic analysis. It compels us to consider seriously the earlier-generation warnings about the impact of investors' animal spirits and financiers' liquidity-presence using cognitive-based and social psychology heuristics. Innovative in its subject matter, approach, theoretical development and policy prescriptions, this constructivist pluralist approach can contribute to important debates. This fresh look in macroeconomics can fruitfully be applied by macroeconomists, policymakers, and market participants to prevent effective demand shortages, stimulate the economy, preserve job creation, and impact redistribution, sustainability and social inclusion.In this timely book, Theodore Koutsobinas develops a synthesis of Keynes's macroeconomic theory with contemporary developments in behavioral macroeconomics to analyze urgent real-world challenges, and he proposes successful solutions for macroeconomic policy. This volume uniquely explains how Keynes's magnificent, crucial, but long-forgotten dynamics can be analyzed on the basis of behavioral foundations to explain amplified global finance cycles, booms and busts, and macroeconomic instability with harmful effects on incomes and jobs. - Demonstrates the dynamics of asset yields in financial markets for global macroeconomic modeling in a standard model by re-generating Keynes's liquidity-preference theory as a liquidity-premium approach in a financial portfolio and macroeconomic equilibrium framework - Showcases for the first time the implications of radical Keynesian uncertainty through attribute-heuristic substitution and intuitive judgment - Proposes and utilizes highly relevant cognitive-based heuristics and attributes in cognitive and social psychology as agents' behavioral expectations in macroeconomic modeling for better diagnosis and forecasting in difficult macroeconomic situations, compared to only probability-based techniques

Table of contents

• Title of Book
• Cover image
• Title page
• Table of Contents
• Copyright
• Dedication
• Preface
• Acknowledgments
• Section I Changing times, new foundations
• Chapter 1 Introduction: the case for Keynesian behavioral macroeconomics
• Section II Keynes, the traditional critique and the Cambridge (UK) Keynesians
• Chapter 2 The critical edge of Keynes’s General Theory
• Chapter 3 The early traditional critiques of Keynes’s analysis
• Chapter 4 Money rates of interest, finance, and the missing portfolio equilibrium
• Chapter 5 Old debates, new theories?
• Section III The development of behavioral economics of Keynes
• Chapter 6 Conventional expectations in Keynesian radical uncertainty
• Chapter 7 From conventional judgment to behavioral expectations
• Chapter 8 Keynes as the first behavioral economist
• Chapter 9 Keynes’s behavioral microfoundations
• Section IV Monetary and financial aspects of Keynes’s macroeconomics
• Chapter 10 Multiple portfolio equilibria in Keynesian theorizing
• Chapter 11 Portfolio allocation, liquidity preference, and the q-ratio
• Chapter 12 Beyond standard views: liquidity preference shifts in Keynes’s theory
• Chapter 13 From the workhorse IS-LR-MP model to modern behavioral Keynesianism
• Chapter 14 Modern Keynesian approaches
• Section V The Keynesian reorientation of behavioral macroeconomics
• Chapter 15 Standard baseline models in behavioral macroeconomics
• Chapter 16 Keynesian behavioral macroeconomics
• Chapter 17 Comprehensive insights from a Keynesian perspective
• Section VI The way ahead: further developments
• Chapter 18 Methodological and quantitative issues of behavioral expectations
• Chapter 19 Policy issues in the Keynesian behavioral framework
• Section VII Extensions of the Keynesian behavioral framework
• Chapter 20 The relevance of sustainability
• Chapter 21 Global trends and the culture of radical uncertainty
• Chapter 22 Political economy and the impact of Keynesian behavioral foundations
• Chapter 23 Behavioral baseline models for the next generation
• Chapter 24 An afterthought
• Bibliography
• Appendix A. Glossary
• Appendix B. Comparative figures and tests from simulations
• Appendix C. Interactive simulations of the model
• Appendix D. The code of the model
• Endnotes
• Index