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ABSTRACT Irving Fisher offered a 'tentative' debt-deflation theory of great depressions rather than a fully consistent theory of his 'creed': "I say 'creed' because, for brevity, it is purposely expressed dogmatically and without proof. [...] it is quite tentative" (Fisher 1933, p. 337). The paper argues that prominent authors who strived to explain his ideas within the Walrasian apparatus could not deliver a consistent theory of deflation with protracted depression. This is basically because destabilizing market forces cannot dominate in that conceptual framework. By contrast, owing to the way competitive forces operate under fundamental uncertainty, Keynes' General Theory escapes the contradiction.

The paper presents both the New Consensus and Keynesian equilibrium within the usual four competitive macro-markets structure. It gives theoretical explanations of the pernicious effects that the NCM governance, which has been designed for ergodic stationary regimes, brings about in Keynesian non-ergodic regimes. It puts forward Keynesian principles of governance which include monetary, budgetary and fiscal instruments, and suggest new directions for the positive and normative analysis of macro-policies. (Rev Econ Polít/GIGA)