Facing Up to Keynesian Uncertainty

The transcript discusses Keynes' views on irreducible uncertainty, distinguishing it from measurable risk. It highlights the role of economic stability and conventions in managing uncertainty. Keynes' work on probability and the problem of knowledge in economics is explored, emphasizing the challenges of predicting future events. The discussion also touches on historical perspectives, such as Frank Knight's work and the impact of global instability on economic thought.

What is the main difference between irreducible uncertainty and risk as discussed in the video?

• Both are measurable but in different ways.

• Risk is like a deck of cards, measurable, while irreducible uncertainty is not.

• Irreducible uncertainty can be measured, while risk cannot.

• Irreducible uncertainty is predictable, while risk is not.

According to Keynes, what happens to economic conventions during unstable periods?

• They remain unchanged.

• They become more complex.

• They become more reliable.

• They fail to provide adequate guidance.

How does Keynes suggest we handle the unpredictability of future events like wars or oil prices?

• By forming calculable probabilities.

• By using advanced statistical models.

• By relying on historical data.

• By acknowledging the limits of our knowledge.

What central problem in economics does Keynes highlight in his work?

• The problem of knowledge.

• The problem of market competition.

• The problem of resource allocation.

• The problem of inflation.

What does Alfred Marshall consider the most difficult problem in economics?

• The problem of resource allocation.

• The problem of inflation.

• The problem of time.

• The problem of market competition.