Uncertainty, decision-making, habit and institution: a possible articulation between Keynesians and Neoinstitutionalists

Abstract

On the one hand, following Keynes and the Post Keynesians, it is possible to infer two types of uncertainty: one that refers to the process of obtaining knowledge (the epistemological uncertainty) and the other which deals with the reality that one has to understand (the ontological uncertainty). It is important to stress that both are related to the decision-making process. On the other hand, regarding the Neoinstitutionalist perspective, habits are the substance of institutions and as so being they reverberate in the individual as well as at the structural level. Hence, are habits and institutions not able to reduce uncertainty? This paper aims to answer this question, articulating the Keynesian and the Neoinstitutionalist theories. The point is to show how habits and institutions in the latter can contribute to reducing uncertainty in the former approach.

Keywords:
Keynesian Theory; Neoinstitutionalist Theory; Uncertainty; Habit; Institution