Keynes and strongEconomicstrong Development - devecon.cn.pdfVIP

Keynes and Economic Development A.P. Thirlwall University of Kent1 Introduction Keynes was not a development economist as the description is used today. He did not address directly issues of national or international poverty and income distribution; only indirectly through his focus on unemployment which has always been, and remains, a major cause of poverty in both developed and developing countries. It is no accident that the one billion workers identified by the International Labour Organisation (ILO) in Geneva as unemployed and underemployed matches almost exactly the one billion people measured by the World Bank as living in extreme poverty on less than $1 a day. They are more or less the same people. Even though Keynes was not a development economist in the conventional sense, his theoretical apparatus and thinking about what drives capitalist economies, formalised in his magnum opus, The General Theory of Employment Interest and Money (1936), and his proposals at the Bretton Woods Conference in 1944 for a new international monetary order (which were largely ignored), do have relevance for the debates that take place today in development economics. In this short article, I attempt to get into Keynes’s mind and to try and guess what he might have said and recommended on some of the pressing issues facing developing countries (and the world economy) today. Keynes-Harrod Growth Theory When I teach growth and development economics, one of the first things I do is to teach the simple Harrod (1939) growth model, and ask the students where they think less 1 Contact address: Department of Economics, Keynes College, University of K