J M Keynes's Non (Sub) Additive, Interval Valued Approach to Probability is the Foundation for Both Keynes's Weight of the Evidence Analysis in the A Treatise on Probability and His Uncertainty Definition in the General Theory
25 Pages Posted: 29 Aug 2017
Date Written: August 26, 2017
It is a straight forward exercise to demonstrate that the concept of the weight of the evidence in the A Treatise on Probability and the concept of uncertainty in the General Theory both follow directly from Keynes’s analysis and application of Boole’s development of the concept of upper and lower probabilities in The Laws of Thought in 1854 in Part II of the A Treatise on Probability.
This demonstration shows that both GLS Shackle’s definition of uncertainty and Paul Davidson’s definition of uncertainty, not only have nothing to do with the work of J M Keynes, but are directly in conflict with it. Neither the Shackle or the Davidson approaches can deal with interval valued probability. Shackle and Davidson can only deal with numerical probabilities based on the limiting frequency interpretation of probability.
Keywords: weight, interval vaued probability, upper and lower probabilities, nonnumerical probabilites, liquidity preference
JEL Classification: B10, B12, B14, B16, B20, B22
Suggested Citation: Suggested Citation