Keynesian Theories of Investment and Finance: Neo, Post, and New

Investment theory has long been the subject of much economic research and a corresponding amount of controversy. One of these controversies centers on whether financial factors that are independent of the real productivity of an investment project influence the decision to undertake the project. The issue addressed in this paper concerns the relationship between new developments in research on the link between finance and investment, and the views advanced by traditional post-Keynesian and neo-Keynesian schools. In particular, do developments in what has come to be called the “new” Keynesian approach represent a convergence in any meaningful sense between post-Keynesian views and the mainstream intellectual progeny of the neoclassical synthesis in macroeconomics? Also, have the developments in new Keynesian economics advanced the post-Keynesian approach, or is the mainstream just rediscovering in a limited way what the post-Keynesians have known all along? We also shall speculate on what is yet to be learned from the various approaches that may advance their respective research programs.