Palacio Vera, Alfonso (2003) Capital accumulation, technical progress and wage flexibility : Keynes'approach to aggregate supply and demand analysis revisited. [Working Paper or Technical Report]
Official URL: http://eprints.ucm.es/6815/
The aggregate supply and demand model (AS-AD) posited by Keynes in the General Theory and elaborated by Weintraub and Davidson is analysed by inserting a CES production function. We perform a comparative statics analysis where the effects on the equilibrium level of employment and the price level of changes in a wide range of variables and parameters are worked out. The effect of changes in the money wage rate on the level of employment and the price level are found to be ambiguous. Finally, we argue that this approach provides a more consistent approach than conventional AS-AD analysis does.
|Item Type:||Working Paper or Technical Report|
|Additional Information:||JEL Classification: E12, E24, E31|
|Uncontrolled Keywords:||Capital, Aggregate supply and demand analysis, Involuntary employment, Technical progress, Capital accumulation and deflation|
|Subjects:||Social sciences > Economics > Money|
|Series Name:||Documentos de Trabajo de la Facultad de Ciencias Económicas y Empresariales|
Barro, R.J. (1994); “The Aggregate-Supply/Aggregate-Demand Model”, Eastern Economic Journal, vol. 20, no.1, Winter, pp. 1-6.
Bernanke, B.S. (1981); “Bankruptcy, Liquidity, and Recession”, American Economic Review, Papers and Proceedings, vol. 71, no.2, May, pp. 155-59.
Caskey, J. and S. Fazzari (1987); “Aggregate demand contractions with nominal debt commitments: is wage flexibility stabilizing?”, Economic Inquiry, vol. 25, October, pp. 583-97.
Chick, V. (1983); Macroeconomics After Keynes: A Reconsideration of the General Theory, Cambridge (MA): The MIT Press.
Colander, D. (1995); “The Stories We Tell: A Reconsideration of AS/AD Analysis”, Journal of Economic Perspectives, vol.9, no. 3, Summer, pp. 169-88.
DeLong, J.B. and L.H. Summers (1986); “Is Increased Price Flexibility Stabilizing?”, American Economic Review, vol.76, no.5, December, pp.1031-44.
Driskill, R.A. and S.M. Sheffrin (1986); “Is Price Flexibility Destabilizing?”, American Economic Review, vol.76, no.4, September, pp. 802-807.
Dutt, A.K. (1986/87); “Wage rigidity and unemployment: the simple diagrammatics of two views”, Journal of Post Keynesian Economics, vol. 9, no.2, pp. 279-90.
Dutt, A.K. (2002); “Aggregate Demand-Aggregate Supply Analysis: A History”, History of Political Economy, vol. 34, no.2, pp. 321-63.
Davidson, P. (1962); “More on the Aggregate Supply Function”, Economic Journal, vol. 72, no. 286, June, pp. 452-57.
Davidson, P. (1967); “A Keynesian View of Patinkin´s Theory of Employment”, Economic Journal, vol. 77, no. 307, September, pp. 559-78.
Davidson, P. (1972); Money and the Real World, London: Macmillan.
Davidson, P. and E. Smolensky (1964); Aggregate Supply and Demand Analysis, New York: Harper and Row.
Dillard, D. (1948); The Economics of John Maynard Keynes: the Theory of a Monetary Economy, Englewood Cliffs, NJ: Prentice-Hall.
Fisher, I. (1933); “The Debt-Deflation Theory of Great Depressions”, Econometrica, 1, October, pp. 337-57.
Flaschel, P. and R. Franke (2000); “An Old-Keynesian Note on Destabilizing Price Flexibility”, Review of Political Economy, vol.12, no. 3, pp. 273-83.
Graziani, A. (1990); “The Theory of the Monetary Circuit”, Economies et Sociétés, Monnaie et Production, no.7, pp. 7-36.
Hahn, F.H. and R.M. Solow (1986); “Is Wage Flexibility a Good Thing?”, in W. Beckerman (ed.) Wage Rigidity and Unemployment, pp. 1-20, Baltimore, John Hopkins University Press.
Howitt, P. (1986); “Wage Flexibility and Full Employment”, Eastern Economic Journal, July-September, pp. 237-42.
Kaldor, N. (1934): “A Classificatory Note on the Determinateness of Equilibrium”, Review of Economic Studies, vol. 1, no.2, pp. 122-36.
Kalecki, M. (1944); “Professor Pigou on the ‘Classical Stationary State’ – A Comment”, Economic Journal, vol. 54, April, pp. 131-32.
Keynes, J.M. (1936); The General Theory of Employment, Interest and Money, Cambridge: Macmillan.
King, J.E. (1994); “Aggregate supply and demand analysis since Keynes: a partial history”, Journal of Post Keynesian Economics, vol.17, no.1, pp. 3-31.
Kregel, J.A. (1976); “Economic Methodology in the Face of Uncertainty: The Modelling Methods of Keynes and the Post-Keynesians”, Economic Journal, vol. 86, no. 342, June, pp. 209-25.
López, J. and T. Mott (1999); “Kalecki Versus Keynes on the Determinants of Investment”, Review of Political Economy, vol.11, no.3, pp. 291-301.
Marty, A.L. (1961); “A Geometrical Exposition of the Keynesian Supply Function”, Economic Journal, vol. 71, no. 283, pp. 560-65.
McCombie, J.S.L. (1985/86); “Why cutting real wages will not necessarily reduce unemployment – Keynes and the ‘postulates of the classical economics’”, Journal of Post Keynesian Economics, vol. 8, no. 2, pp. 233-248.
Minsky, H. (1975); John Maynard Keynes, New York: Columbia University Press.
Modigliani, F. (1944); “Liquidity Preference and the Theory of Interest and Money”, Econometrica, vol. 12, January, pp. 45-88.
Moore, B.J. (1988); Horizontalists and Verticalists: The macroeconomics of credit money, Cambridge: Cambridge University Press.
Palacio-Vera, A. (2002); “The ‘Modern’ View of Macroeconomics: Some Critical Reflections”, Working paper no. 2002-017, Facultad de Ciencias Económicas y Empresariales, Universidad Complutense de Madrid, Spain.
Palley, T.I. (1996); Post Keynesian Economics: Debt, Distribution and the Macro Economy, London: Macmillan.
Patinkin, D. (1965); Money, Interest, and Prices, 2nd edition, New York, Harper and Row.
Rowthorn, R. (1999); “Unemployment, wage bargaining and capital-labour substitution”, Cambridge Journal of Economics, vol. 23, no.4, pp. 413-26.
Sawyer, M.C. (2001); “The NAIRU: a critical appraisal”, in P. Arestis and M.C. Sawyer (eds.), Money, Finance and Capitalist Development, pp.220-54, Cheltenham (UK), Edward Elgar.
Tobin, J. (1975); “Keynesian Models of Recession and Depression”, American Economic Review, Papers and Proceedings, vol. 65, no.2, May, pp. 195-202.
Vickers, D. (1987); “Aggregate supply and the producers´ expected demand curve: performance and change in the macroeconomy”, Journal of Post Keynesian Economics, vol.10, no.1, pp. 84-104.
Weintraub, S. (1956); “A Macroeconomic Approach to the Theory of Wages”, American Economic Review, vol.46, no.5, December, pp. 835-56.
Weintraub, S. (1957); “The Micro-Foundations of Aggregate Demand and Supply”, Economic Journal, vol. 67, no. 267, September, pp. 455-70.
Weintraub, S. (1958); An Approach to the Theory of Income Distribution, Westport: Greenwood Press.
Wells, P. (1960); “Keynes´ Aggregate Supply Function: A Suggested Interpretation”, Economic Journal, vol. 70, no. 279, September, pp. 536-42.
|Deposited On:||30 Nov 2007|
|Last Modified:||06 Feb 2014 07:51|
Repository Staff Only: item control page