Topic: Resurrecting Keynes & Harrod 
Lecturer:Prof. Gong Gang 
Discussants:Prof. Zhang Shuguang, Prof. Yang Ruyan, Prof. Wang Xiongjian, Prof Sheng Hong, Dr. Zhang Bin, Dr. Cheng Lian 
 
 
 At the 363rd Unirule bi-weekly symposium, Prof. Gong Gang from School of Economics, Nankai University delivered a speech entitled “Resurrecting Keynes & Harrod”.

This lecture was consisted of two of Dr. Gong’s recent paper. One entitled “Resurrecting Keynes――70 Years after the General Theory”, the other “Resurrecting Harrod Economic Growth and Fluctuation in Developing Countries”.
The lecture began with questioning the credibility of the "Full confidence expectation”, which is a basic hypothesis behind neoclassical economics. Keynes’ General Theory can be regarded as being a revolution to this neoclassical hypothesis. Keynesian determination of output can be understood as a multiplier process that reflects a market exchange process, which can be shown by the hypothetical example "A Trading Day in Javits Center". Comparing to Walrasian trading process implied by neoclassical economics, "A Trading Day in Javits Center" seems to be more close to the reality. Such a trading process can also express money circulation.
Then he turned to the critique of micro foundation of Keynesian economics. The seemingly lack of a micro foundation of Keynesian economics does not necessarily indicate that its micro-foundation does not exist. The micro foundation of Keynesian economics has been a major research direction of macro economics in the past decades.
Then Prof. Gong discussed the implication of Keynes Economics in China. Comparing to neoclassical economics, Keynesian economics is more appropriate to explain the contemporary market economy in China. This is because China is still a transitional economy with incomplete market which resembles the world Keynes described in his “General Theory”. In addition to that China has abundant labor force and idle capacity which result in excess supply. So Keynes’s demand side analysis would fit China better then Neo-classical economics.
In the second part of the lecture, Prof. Gong, based on the Harrod model, explained why excess labor supply and high economic growth can happen in the same time as the case in China. The key factor behind this phenomenon, he thought, is the imperfect substitution between labor and capital. Under this scenario, even if the equilibrium wage for labor is very cheap, the labor market might not clear.