f demand will lead to higher output and employment (the keynesian position), then, via the accelerator mechanism, it will.
             Similarly, just how successful a deflationary policy is in curing inflation depends in large measure on people’s expectations. If people believe that a deflationary policy will cause a recession, then firms will stop investing and will cut their workforce. If they believe that it will cure inflation and restore firms’ competitiveness abroad, firms may increase investment. To manage the economy successfully, therefore, the government must convince people that its policies will work. This is as much a job of public relations as of pulling the right economic levers.
             The importance of expectations has long been appreciated by macroeconomists. When John Maynard Keynes (1883-1946), published his General Theory of Employment, Interest, and Money in 1936, he set off a revolution. Within Keynes’s General Theory expectation arose most importantly in the analysis of investment. For example, since building a factory takes time there will be a delay before output is produced. So the entrepreneur has to form expectations about the demand for a product in the future in order to assess the likely profitability of the venture.
             However time and uncertainty are inextricably linked in post-Keynesian thinking, as evident in the writings of Robinson and Shackle. They stress that economies must be analysed as a sequential process through time and not in an essentially timeless state Keynes seemed to pose. The present is seen as the l
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