A Proposed Methodological Synthesis of Post-Keynesian and Institutional Economics

Post-Keynesian and institutionalist writers have commented on the theoretical and conceptual commonalities between the two schools. Some have suggested a theoretical synthesis based on these commonalities. In spite of these theoretical and conceptual commonalities each tradition has developed significantly different methods of analysis. Instead of theoretical or conceptual synthesis we seek here to present a methodological synthesis. Institutionalist methods have yielded "plausible" explanations, but these have been too "vague and suggestive" to be consistently used for economic policy. Post-Keynesian methods have policy necessary "rigor," but the similarity to neoclassical methods has exposed post-Keynesian theories to unwarranted synthesis with incompatible traditions. This essay presents a synthesis of post-Keynesian and institutionalist methodology, one of "plausible rigor," combining elements of "institutional dynamics" with a heuristic framework based on John Dewey's "instrumental logic," and proposes that the resulting approach overcomes weaknesses in the methods of analysis of both schools.