Abstract
One of the fundamental insights that we owe to the work of Clower (1965) and Leijonhufvud (1968) is that the basic difference between the economics of the classics and the economics of Keynes lies in the assumptions made about the adjustment behaviour of the two systems: ‘in the short run, the “Classical” system adjusts to changes in money expenditures by means of price-level movements; the Keynesian adjusts primarily by way of real income movements’ (Leijonhufvud, 1968, p. 51). ‘In the Keynesian macrosystem the Marshallian ranking of price- and quantity adjustments speeds is reversed … The “revolutionary” element of the General Theory can perhaps not be stated in simpler terms’ (Leijonhufvud, 1968, p. 52).
The ideas of this chapter were first presented at the meeting of the Subcommittee for Economic Theory of the Verein für Socialpolitik, September 1978, in Hamburg.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Barrow, R. J., and H. I. Grossman (1971) ‘A General Disequilibrium Model of Income and Employment’, American Economic Review, 61: 82–93.
Benassy, J. P. (1975) ‘Neo-Keynesian Disequilibrium Theory in a Monetary Economy’, Review of Economic Studies, XLII: 503–24.
Benassy, J. P. (1976) ‘The Disequilibrium Approach to Monopolistic Price Setting and General Monopolistic Equilibrium’, Review of Economic Studies, XLIII: 69–81.
Böhm, V. (1980) Preise, Löhne and Beschäftigung, Tubingen: J.C.B. Mohr Verlag.
Chamberlin, E. H. (1956) The Theory of Monopolistic Competition, Cambridge, Mass.: Harvard University Press.
Clower, R. W. (1965) ‘The Keynesian Counter-Revolution: A Theoretical Appraisal’ in F. M. Hahn and F. P. R. Brechling (eds), The Theory of Interest Rates, London: Macmillan.
Drazen, Allan (1980) ‘Recent Developments in Macroeconomic Disequilibrium Theory’, Econometrica, 48: 283–306.
Drèze, J. H. (1975) ‘Existence of an Exchange Equilibrium under Price Rigidities’, International Economic Review, 16: 301–20.
Dréze, J. H. (1982) ‘Decision Criteria for Business Firms’, CORE Discussion paper no. 8211.
Grandmont J. M and G. Laroque (1976) ‘On Temporary Keynesian Equilibria’, Review of Economic Studies, XLIII: 53–67.
Hahn, F. H. (1976) ‘Keynesian Economics and General Equilibrium Theory: Reflections on some Current Debates’, Stanford University, Economics series, Technical Report 219.
Hahn, F. H. (1978) ‘On Non-Walrasian Equilibria’, Review of Economic Studies, 45: 1–17.
Hildenbrand, K. and W. Hildenbrand (1978) ‘On Keynesian Equilibria with Unemployment and Quantity Rationing’, Journal of Economic Theory, 18: 255–77.
Honkapohja, S., and T. Ito (1980) ‘Inventory Dynamics in a Simple Disequilibrium Macroeconomic Model’, Scandinavian Journal of Economics, 82: 184–98.
John, R. (1980) ‘A Remark on Conjectural Equilibria’, CORE Discussion paper no. 8009.
Kaldor, N. (1939) ‘Speculation and Economic Stability’, Review of Economic Studies, 7: 1–27.
Keynes, J. M. (1936) The General Theory of Employment, Interest, and Money, London: Macmillan.
Leijonhufvud, A. (1968) On Keynesian Economics and the Economics of Keynes, New York: Oxford University Press.
Malinvaud, E. (1977) The Theory of Unemployment Reconsidered, Oxford: Blackwell.
Muellbauer, J., and R. Portes (1978) ‘Macroeconomic Models with Quantity Rationing’, Economic Journal, 88: 788–821.
Negishi, T. (1960) ‘Monopolistic Competition and General Equilibrium’, Review of Economic Studies, 28: 196–201.
Sondermann, D. (1974) ‘Temporary Competitive Equilibrium under Uncertainty’, in J. H. Dréze (ed.), Allocation under Uncertainty: Equilibrium and Optimality, New York: Wiley, ch. 13.
Walras, L. (1954) Elements of Pure Economics, trans. W. Jaffé, Homewood, Ill.: Irwin.
Zeeman, E. C. (1974) ‘On the Unstable Behaviour of Stock Exchange’, Journal of Economic Theory, 1 (1).
Editor information
Editors and Affiliations
Copyright information
© 1985 George R. Feiwel
About this chapter
Cite this chapter
Sondermann, D. (1985). Keynesian Unemployment as Non-Walrasian Equilibria. In: Feiwel, G.R. (eds) Issues in Contemporary Macroeconomics and Distribution. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-06879-1_7
Download citation
DOI: https://doi.org/10.1007/978-1-349-06879-1_7
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-06881-4
Online ISBN: 978-1-349-06879-1
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)