On Austrian-Post Keynesian Overlap: Just How Far is New York from Knoxville, Tennessee?

Abstract

The paper critically explores Davidson's axiomatic-based argument that Post Keynesian and Austrian economics lack meaningful analytical overlap. It challenges his dismissal of the Austrian perspective as little more than a poor relation of orthodoxy which offers little gains in intellectual trade for Post Keynesianism. It will be maintained that the Austrian approach shares all of the axioms, and more besides, highlighted by Davidson as the sole preserve of Post Keynesian economics. He concedes too little to the Austrians and too much to Keynes and the Post Keynesians. Davidson neglected the evolving intellectual affinities between these two research traditions by ignoring areas of commonality and exaggerating the extent of discord. He endeavoured to diminish the standing of Austrian economics by reducing it to a special 'backwater' of neoclassicalism whilst at the same time promoting his own particular variant of Post Keynesianism as a general representation of the entire school partly in order to present a more unified and cohesive alternative to the mainstream than in actuality.