TITLE : MACROECONOMICS AND MONETARY THEORY.*

The lecture notes presented in this book constitute the substance of a graduate course I have been giving, at a length gradually increasing from ten to about fosty lectures, since 1964-65 at the London School of Economics. The notes were transcribed lecture by lecture in the 1969-70 session by a team of scribes organized by Hamish Gray and consisting of Bruce Brittain, Donna Hamway, Parker Hudson, Ninos Hadjigeorgiou, Ron Schaffer and David Stanton. They were then checked by myself for accuracy before distribution to students though I did not attempt to reinsert the finer details of analysis that the scribes missed. I am grateful to David Laidler for some later comments and I have since re-read them though rather hastily, and added to them where I thought necessary for clarity. They remain lecture notes, however.

In present circumstances there seem to be two cogent reasons for the publication of lecture notes The first is that one's professional responsibilities and interests tend to be preoccupied by keeping up with the subject and attempting to contribute to its advance, leaving little if any time for the writing of textbooks. Yet textbooks are the medium through which advances of knowledge are diffused from the major research centres to students and their teachers in other university institutions concerned primarily with teaching; and good textbooks are essential to the establishment and maintenance of intellectual democracy and equality of educational opportunity in the far-flung contemporary university system, in which only a small minority of students can study at the major centres of research. The publication of lecture notes is a compromise solution to the dilemma.

The second, and perhaps more positive, reason is that the amount of material in the form of articles, textbooks, and specialized monographs available for the student to read is far greater than he can possibly manage - and frequently either more prolix or more detailed and technical than is appropriate to his requirements. Lecture notes provide a compact survey of the important problems, analytical techniques, and results to be found in the literature, at a level of exposition adjusted to the particular level of qualification of the student. A homogeneous level of exposition is of course the hall-mark of the textbook; but compactness is usually not, though it may save the student a great deal of reading time. Further, lecture notes enable both students and their teachers to grasp fairly quickly how a field of knowledge is envisaged by the lecturer, what subjects are considered important and what not, in contrast to the text-book, which attempts to be a comprehensive representation of the literature as it stands.

The approach of the lectures to the field is explained in the first lecture, and need not be discussed here. There is, however, one general comment that should be made. The structure of the series is in a sense schizophrenic, dealing as it does first with the broad outlines of Keynesian economics and then with monetary theory viewed against the background of the neo-classical quantity-theory tradition, with Keynes appearing first as the founder of Keynesianism and later as the founder of the capital-theoretic contemporary approach to monetary theory. This schizophrenia is the result of the fact, which Axel Leijonhufvud's monumental book On Keynesian Economics and the Economics of Keynes has shown, that Keynesian economics as it has been developed by the followers of Keynes, especially by the Harvard group led by Alvin Hansen and by the econometricians and forecasters everywhere, is something quite different from the thinking of Keynes himself, which was deeply rooted in the preceding quantity theory tradition. As time passes, it should become possible to develop a more unified and homogeneous synthetic approach to the field, in which Keynes will appear as the great intellectual bridge between the neo-classical and the contemporary theories of money and macro-economics.

HARRY G. JOHNSON London March 17, 1971.