Abstract
The “economics of conventions” is a research program in social science (including economics) emerging at the end of the 1980s—but the first (and the greatest) conventionalist economist is Keynes, when he attempted to give a new account of the 1929 crisis, in his major work The general theory of employment, interest and money (1936). Some of its most innovative features could not have been perceived before the retrospective look offered by the “economics of conventions.” By stressing the role of conventions, the conventionalist economists make it clear, for the first time, that 1929 crisis must be traced back in Keynes’s thought to twin “bad” conventions, one about the link between the financial system and the productive system, and another one about the link between the “ideas” distilled by mainstream economic theory and the ruling ideas within the political, economic and social spheres. This duality between economy and economics seems to apply as well to the present crisis, which suggests that its roots may be deeper than generally thought- and the solutions more difficult.
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1) For excellent discussions, I am deeply indebted to Professors Akira Ebikuza, Kenkichi Nagao, Assoc. professor Junya Tatemi and Mr. Yu Kurosawa (Osaka City University); Professors Takayuki Nakahara (Hannan University) and Hiroyuki Uni (Kyoto University). The comment of an anonymous referee allowed me to clarify an important point. Misunderstandings and mistakes are mine.
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Favereau, O. Keynes After the Economics of Conventions. Evolut Inst Econ Rev 10, 179–195 (2013). https://doi.org/10.14441/eier.A2013010
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DOI: https://doi.org/10.14441/eier.A2013010