Post Keynesian theory, technology policy, and long-term growth

Abstract

Research and innovation are not addressed as central features in most Post Keynesian models, which integrate technological progress through capital accumulation. Analyzing aggregate demand and unemployment without integrating the impact of research leads to an incomplete understanding of the growth process. This paper aims at integrating the analysis of research in the Post Keynesian approach. Firms' inability to support basic, unfettered research contributes to the instability of capitalism, since it reduces tomorrow's investment opportunities. In a nonergodic world, true and fundamental uncertainty explains why firms choose such a strategy, and why a "comprehensive socialization of investment" is necessary through adequate public policies.