From The Keynesian Revolution to the Klein-Goldberger model: Klein and the dynamization of Keynesian theory

According to Klein, Keynes’s General Theorywas crying out for empirical application. He set himself the task of implementing this extension. Our paper documents the different stages of his endeavor, focusing on his TheKeynesian Revolutionbook, his Journal of Political Economyarticle on aggregate demand theory, and his essay on the empirical foundations of Keynesian theory published in the Post-Keynesian Economics book edited by Kurihara. Klein’s claim is that his empirical model (the Klein-Gold-berger model) vindicates Keynes’s theoretical insights, in particular the existence of involuntary unemployment. While praising Klein for having succeeded in making Keynesian theory empirical and dynamic, we argue that he paid a high price for this achievement. Klein and Goldberger’s model is less Keynesian than they claim. In particular, Klein’s claim that it validates the existence of involuntary unemployment does not stand up to close scrutiny