The Keynesian Illusion

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Really many many thanks.

I do know about Keynes and about Keynesianism. I am old enough too have been taught Keynesian theory as orthodoxy both as an undergraduate and graduate student. My father - a PhD economist whose PhD advisor was the great Keynesian Nobel Prize winner James Tobin - called himself a Keynesian - almost as a statement of religion. In my youth my father and I wrote an empirical paper using a Keynesian model. I studied with Keynesians - I took classes from Bob Solow, an avowed Keynesian. I worked as a research assistant for Stan Fischer doing empirical work using a Keynesian model. One of my mentors was Axel Leijonhufvud whose great and famous work was a book called On Keynesian Economics and the Economics of Keynes. When I was a student we had to study the history of economic thought - I have read Keynes General Theory and some of Keynes lesser works - I even got a perfect score on an examination about them. I participated in (witnessed mostly) a long debate between Leijonhufvud and another great Keynesian Don Patinkin about what Keynes really meant and actually said. Knowledge of Keynesianism and Keynesian models is even deeper for the great Nobel Prize winners who pioneered modern macroeconomics - a macroeconomics with people who buy and sell things, who save and invest - Robert Lucas, Edward Prescott, and Thomas Sargent among others. They also grew up with Keynesian theory as orthodoxy - more so than I. And we rejected Keynesianism because it doesn't work not because of some aesthetic sense that the theory is insufficiently elegant.