How My Life and Work Have Been Influenced by J.M. Keynes and F.H. Knight: Introduction and Summary

Abstract

This chapter aims to serve as a plain introduction and brief summary of my new book entitled J.M. Keynes versus Frank H. Knight: Risk, Uncertainty and Decision. Speaking of myself, I have been a professional economist more than 50 years. For those long years, so many things and events, mostly beyond my expectations, have happened in both Japan and foreign countries. Although I was fortunately awarded a Ph.D. from Rochester, I was quite annoyed by the practical irrelevance of general equilibrium theory, a very elegant field of economic science, which I myself taught to my students at Pittsburgh in the 1970s. When Oscar Morgenstern visited Pittsburgh, he kindly advised me to turn my interest to the economics of risk and uncertainty, a newly rising subject promoted by my contemporaries. It was a rather surprising fact that while J.M. Keynes and F.H. Knight did classical contributions to risk and uncertainty theories in the same year of 1921, their relations to more modern theories including George Akerlof, Joseph Stiglitz, and Richard Thaler had not been fully elucidated. Clarifying the total picture of such connections is an important motivation of writing this paper.