Working Paper No 879

repec.nep.his

n?u=RePEc:lev:wrkpap:wp_879&r=his

primarily determined by institutions and social norms. If one accepts these features as essential,

and based on the aforementioned methodological criteria for abstraction, the Kaleckian closure

emerges as a more appropriate and general closure compared to the classical, neoclassical, and

neo-Keynesian ones. This answers the first of the two endogeneity critiques.

Finally, I turn to the “shock-dependent effects” critique. The main conclusion of the

methodological discussion was that one cannot criticize a model just by the complications that

arise at a less abstract level, except if the abstract model fails the criteria for appropriate

abstraction. The Kaleckian model does not fail these two criteria. Therefore, I conclude that the

second “endogeneity critique” is also not valid, although it provides insights for future work

within the Kaleckian framework.

The paper proceeds as follows. Section 2 discusses the concepts of abstraction and closure.

Section 2.1 examines the use of abstraction as an indispensable methodological tool of the

economist; section 2.2 explains Lawson’s two methodological criteria for what constitutes an

appropriate abstraction and section 2.3 argues that closure is also a special kind of abstraction.

Section 3 discusses the Kaleckian model and section 4 shows why the model should be

understood as a hybrid closure of classical and Keynesian origins. Section 5 argues that the

Kaleckian closure can capture the basic and essential characteristics of the capitalist economy

better than the closures proposed by the classical, the neoclassical, and the neo-Keynesian models.

In section 6, we discuss the “shock-dependent effects” critique. Section 7 concludes.

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