Abstract
One of the fundamental purposes of Keynesian theory is to present a model of the economy where transactions take place at prices that do not achieve the equilibrium of supply and demand as the classics understood it. This implies that, in such a model, short-run adjustments must take place at least partly by quantity rationing instead of by price movements.
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This work was sponsored by the Centre National de la Recherche Scientifique, Équipe de Recherche Fondamentale en Économie Mathèmatique (ERA No 507). Partial support from the Fond National Belge de la Recherche Scientifique is gratefully acknowledged while J. M. Grandmont was visiting CORE during the acedemic year 1972–3. We wish to thank J. P. Benassy, C. J. Bliss, G. Delange, J. Dréze, F. H. Hahn and A. P. Kirman for their perceptive comments and suggestions. The paper is printed in this volume by the kind permission of the editors of the Review of Economic Studies, in which journal and version appeared in February, 1976.
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Grandmont, JM., Laroque, G. (1977). On Temporary Keynesian Equilibrium. In: Harcourt, G.C. (eds) The Microeconomic Foundations of Macroeconomics. Other International Economic Association Publications Series. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-03236-5_3
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DOI: https://doi.org/10.1007/978-1-349-03236-5_3
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