INTRODUCTION

Any discussion of Keynesians and monetarists must inevitably come to terms with the wide diversity of approaches that exist under these headings. To some extent this task has already been performed in terms of our distinction between neo-Walrasian and Wicksellian elements of the neoclassical synthesis. Employing this distinction, it appears that as far as the Keynesians are concerned the Wicksellian version forms the dominant theoretical foundation. In this chapter we will show that this is particularly true of James Tobin who is selected as the most sophisticated representative of the Keynesian position. By contrast the Post Keynesians, because they reject the neoclassical synthesis, are not open to the objections raised here. On the monetarist side we have already noted the need to distinguish between Friedman and monetarists such as Brunner and Meltzer. Friedman will be discussed in detail in chapter 6 so here we will be concerned with the Brunner–Meltzer brand of monetarism and the objective will be to show that they employ the same neoclassical-Wicksellian structure as Tobin. This leaves only the new ‘classical’ macroeconomics of monetarism mark II as a further monetarist alternative. The latter is relegated to a brief discussion at the end of this chapter on the grounds that it offers nothing new in terms of resolving the theoretical issues at stake. As Fusfeld (1980) puts it, Rational Expectations arrives too late to save neoclassical economics.