Microfoundations of Keynesian Economics: an Evolutionary Approach to Stabilizing Unstable Economy

This book presents a new vision of Keynesian macroeconomics for readers seeking a rigorous yet intuitive understanding of economic stability and fluctuation. Moving beyond representative-agent models, it develops a monetary production economy in which firms adjust investment through confidence, coordination, and institutional constraints. The economy evolves through a sequence of short-period equilibria and stabilizes within a “corridor” shaped by real anchors, nominal rigidities, and financial structure. Combining evolutionary investment dynamics, fairness-based wage setting, and a 100-percent-reserve monetary framework, the book offers a unified analysis of money, capital accumulation, and expectations. Rather than viewing instability as inherent indeterminacy, it highlights boundary proximity—how repeated encounters with institutional limits generate inflationary and deflationary pressures. The framework reconciles long-run monetary neutrality with persistent Keynesian asymmetries and provides new insights into classic debates associated with Keynes, Wicksell, Fisher, and Tobin. Written for researchers and advanced students in macroeconomics, the book bridges formal analytical methods with economic intuition. It invites readers to rethink macroeconomic policy not as short-term demand management but as the design of institutions that contain fluctuations and sustain stability over time.