The Concept of probability in the Work of Lord Keynes

Abstract

The interpretation given by Keynes to the notion of probability leads to a model in which the probability is understood as a degree of rational belief conceived as a relationship between a body of knowledge and a proposition or set of propositions. A thoughtful analysis of “Treatise on probability” allows to conclude that: i) the Keynesian model is not a consequence but an extension of “principia Mathematica” and “problems of philosophy” in which the approach to the concept of probability is quite similar to the approach of Russell and Whitehead to mathematics and ii) in addition to the undeniably metaphysical nature, the numerical representation of the logicist probability includes a very small number of cases, because of the heuristic quality of the principle of indifference. Regarding the “Treatise on Money” and the “General Theory”, it is possible to conclude that the quasi-probabilistic treatment of causal relationships between variables shows that Keynes's description about the nature of the “economic system” reveals an ambiguous interpretation of the notions of economic model and stochastic model.

JEL classification: A1 ; C1 ; C4