Journal Article

Back to the future with Keynes

Abstract: This article analyzes Keynes's \\"Economic Possibilities for our Grandchildren\\"- an essay presenting Keynes's views about economic growth into the 21st century - from the perspective of modern growth theory. I find that the implicit theoretical framework used by Keynes to form his expectations about the 21st-century world economy is remarkably close to modern growth models, featuring a stable steady-state growth path driven by technological progress. On the other hand, Keynes's forecast of employment in the 21st century is far off the mark, reflecting a mistaken view that the income elasticity of leisure is much higher than that of consumption.

Keywords: Economic history; National income;

Bibliographic Information

Provider: Federal Reserve Bank of Minneapolis

Part of Series: Quarterly Review

Publication Date: 2008

Issue: Jul

Pages: 10-16

Order Number: v. 32, No. 1