How My Life and Work Have Been Influenced by J.M. Keynes and F.H. Knight: Introduction and Summary
This chapter aims to serve as a plain introduction and brief summary of my new book entitled J.M. Keynes versus Frank H. Knight: Risk, Uncertainty and Decision. Speaking of myself, I have been a professional economist more than 50 years. For those long years, so many things and events, mostly beyond my expectations, have happened in both Japan and foreign countries. Although I was fortunately awarded a Ph.D. from Rochester, I was quite annoyed by the practical irrelevance of general equilibrium theory, a very elegant field of economic science, which I myself taught to my students at Pittsburgh in the 1970s. When Oscar Morgenstern visited Pittsburgh, he kindly advised me to turn my interest to the economics of risk and uncertainty, a newly rising subject promoted by my contemporaries. It was a rather surprising fact that while J.M. Keynes and F.H. Knight did classical contributions to risk and uncertainty theories in the same year of 1921, their relations to more modern theories including George Akerlof, Joseph Stiglitz, and Richard Thaler had not been fully elucidated. Clarifying the total picture of such connections is an important motivation of writing this paper.
According to J.K. Galbraith, we lived through the First Age of Uncertainty in the twentieth century. Around 1990, we witnessed the Fall of the Berlin Fall together with the Collapse of the Soviet Union. Since we experienced the Great Recession caused by the 2008 Lehman Shock, we entered the Second Age of Uncertainty in which the old masters such as Keynes and Knight had superbly returned with new costumes on the academic stage. Surely, we can learn new lessons from old teachings.
This chapter also gives the compact outline of this book. The book as a whole consists of two parts. The first part contains the first four chapters, being concerned with history and micro. The second part contains the following four chapters, dealing with market and application.
KeywordsJ.M. Keynes F.H. Knight Oscar Morgenstern J.K. Galbraith The First Age of Uncertainty The Second Age of Uncertainty
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