Uncertainty: A diagrammatic treatment

Arbeitspapier

In spite of superficial similarities, the way in which uncertainty is understood as a feature of the crisis by mainstream economics is very different from Keynesian fundamental uncertainty. The difference stems from the mainstream habit of thinking in terms of a full-information benchmark, where uncertainty arises from ignorance. By treating uncertain knowledge as the norm, Keynesian uncertainty theory allows analysis of differing degrees of uncertainty and the cognitive role of institutions and conventions. The paper offers a simple diagrammatic representation of these differences, and uses this framework to depict different understandings of the crisis, its aftermath and the appropriate policy response.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Economics Discussion Papers ; No. 2015-36

Classification and Topics

• Classification: Wirtschaft ; Economic Methodology ; Macroeconomics and Monetary Economics: General ; Financial Crises
• Subject: uncertainty ; risk ; ambiguity ; Keynes

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Dow, Sheila
• Event: Veröffentlichung
• (who): Kiel Institute for the World Economy (IfW)
• (where): Kiel
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/110921
• Last update: 10.03.2025, 11:43 AM CET