Logical Cause in J. M. Keynes’s Macroeconomics
Abstract
This paper aims to contribute to the philosophical debate in Keynes by connecting one of the probabilistic logical theories developed in A Treatise on Probability (Keynes, 1921) with his economic theory developed in the General Theory of Employment, Interest and Money (Keynes, 1936). Specifically, we interpret effective demand as an ‘effect’ of the law of marginal propensity to consume (Keynes, 1936) based on the theory of nomological causal knowledge contained in the Notes to Part III of the Treatise on Probability (Keynes, 1921). To do this, we explore some aspects of the theory of knowledge in logical probability in order to achieve the nomological causal knowledge present in the Notes to Part III. Subsequently, we interpret the law of marginal propensity to consume as one of the ‘nomological causes’ of effective demand by reorganizing the Keynesian economic argument based on his logical theory of probability.
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