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"Foreword" -- "Contents" -- "1 Introduction: Who Saw the Coming of the Global Financial Crisis of 2007–2008?" -- "2 Alternative Explanations of How the Capitalist Economy in Which We Live Operates" -- "Theory Provides Explanation" -- "Alternative Theories" -- "3 Understanding the Role of Money and Money Contracts in a Market Economy" -- "The Classical Presumptions That Keynes Overthrew" -- "A Second False Classical Assumption" -- "The Third False Classical Presumption" -- "4 Unemployment: Why Can't People Who Want to Work Find Jobs?" -- "Savings and Liquidity" -- "Two Essential Properties of Liquid Assets" -- "5 Creating a Prosperous Full Employment Economy" -- "6 Can We Prevent Inflation and Still Achieve Full Employment?" -- "Contracts, Prices and Inflation" -- "The Inflation Process in a Keynes World" -- "Incomes Inflation" -- "Incomes Policy" -- "7 The Role of Financial Markets and Liquidity" -- "Financial Markets and Regulation Policy" -- "8 Globalization and International Trade Effects on Employment and Prosperity" -- "The Bretton Woods Solution" -- "Reforming the International Payments System" -- "Reforming the International Payments System" -- "The Case for Capital Controls" -- "The Rules of the IMCU" -- "9 Are Free Trade Agreements Always Beneficial?" -- "10 President Trump's Anti-free Trade Agreements Policy" -- "11 What Economic Policies Can a Democracy Adopt to Assure We Live in a Prosperous, Civilized Capitalist System?

This book presents a clear and concise solution to understanding and alleviating today's global economic challenges in the context of Keynes' school of thought. Davidson explains the importance of the market economy, and unveils how and why global financial crises occur when the liquidity of financial assets traded in the market, suddenly collapse. 70 years after Keynes' death, in another era of financial crisis and economic slump, Keynes' ideas have made a comeback within economic circles. Yet these ideas are not represented in contemporary government policy decisions. This book explains why Keynes' ideas need to be used by political parties in order to restore global prosperity and close the gap between income and wealth inequality. This book will is essential reading for researchers, practitioners, students and the wider public interested in an economic understanding of today's global economic problems.--

How did economic "experts" worldwide fail to predict the financial crisis of 2007-2008? Eminent economist Paul Davidson discusses how mainstream economic theory may not be applicable to the world of experience. Post Keynesian theory is designed to be applicable to the real world, and this book demonstrates how applying it to policy formulation could help practically resolve economic problems. Davidson goes on to demonstrate how many Post Keynesian economists warned of the impending financial crisis as early as 2002. -- Post Keynesian Theory and Policy challenges the axioms on which orthodox economic theory is based and argues against their applicability to a money using, market oriented economy. It explores the basis for Keynes's revolutionary general theory and seeks to dispel misconceptions often found in orthodox textbooks. This accessible and expertly constructed book explains why modern economies use money denominated contracts to organize all market transactions for production and exchange and why the law of comparative advantage argument for free trade is not applicable to mass production industries' exports and imports. -- This book is a valuable resource for professional economists as well as students and academics in economics, political science, and history, who will appreciate its new perspective and analysis of global financial events.

The power of ideas to affect policy -- Ideas and policies that created the first global economic crisis of the twenty-first century -- Reading tea leaves to "know" the future : classical theory's ideas about a capitalist system -- A penny spent is a penny earned : Keynes's ideas on a capitalist economy and the role of money -- The truth about the national debt and inflation -- After recovery comes reform -- Reforming international trade -- Reforming the world's money -- Moving toward a civilized economic society that Keynes would be proud of -- Who was John Maynard Keynes? : a brief biography

The book contains Paul Davidson's major contributions to the economics and policy debates of our times. The relationship between uncertainty, economic theory, international financial markets and global unemployment is analysed throughout. Davidson suggests new solutions for the major problems of the twenty-first century, including volatile financial markets in Asia and beyond, challenging orthodox responses. The differences between the Old-, New-, and Post-Keynesians all vying for Keynes's mantle, are explored.

This revised edition explains why orthodox economic policies have often failed to achieve their objectives and if they work they do so only by inflicting high costs on society. The civilized policies developed in this volume, on the other hand, can achieve society's goals while enhancing the many benefits of an entrepreneurial economy.