28 , 2016-03 , Center for Risk Research (CRR), Shiga University
The purpose of this paper is to discuss and compare two giants in the history ofeconomic thought, J.M. Keynes and F.H. Knight, with special reference to risk,probability, and uncertainty. It is in 1921 that both of them published apparently published similar books onthe economics of risk and uncertainty. While Knight's contribution on risk anduncertainty is now well recognized, Keynes's accomplishments on probability anduncertainty have been rather ignored in the shadow of his most famous book TheGeneral Theory of Employment, Interest and Money (1936). This paper aims to focuson his earlier yet equally important book A Treatise on Probability (1921), and shed anew light on his outstanding ideas and everlasting influences on his later workincluding The General Theory. It is really interesting to see that Keynes's concept ofprobability and uncertainty can be well compared to Knight's distinction between ameasurable risk and a non-measurable uncertainty.