The Dubious Labour Market Analysis in Meltzer’s Restatement of Keynes’s Theory

  • Louise Davidson


Allan Meltzer has given the economics profession an interesting and alternative monetarist perspective to Keynes’s General Theory (Meltzer, 1981).1 Although Professor Meltzer generously acknowledges our useful exchange on an earlier draft of his fascinating paper, there still remain many unresolved analytical disagreements regarding Keynes’s theory. Some of these differences may be questions of interpretation, hence open to differing views, but there is at least one vital relationship in Meltzer’s model that deserves an airing for Meltzer’s version is (a) inconsistent with Keynes’s model and (b) logically inconsistent within Meltzer’s own restatement of Keynes’s theory. The disagreement turns on the specification of the demand for labour function.


Real Wage Aggregate Demand Aggregate Supply Effective Demand Money Wage 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Davidson, P. (1967), ‘A Keynesian View of Patinkin’s Theory of Employment’, Economic Journal, 77 (September), pp. 559–78.CrossRefGoogle Scholar
  2. Davidson, P. and E. Smolensky (1964), Aggregate Supply and Demand Analysis, (New York: Harper & Row).Google Scholar
  3. Friedman, M. et al, (1974), Milton Friedman’s Monetary Framework: A Debate With His Critics, edited by Robert J. Gordon (Chicago: University of Chicago Press).Google Scholar
  4. Keynes, J. M. (1936), The General Theory of Employment, Interest and Money, (New York: Harcourt).Google Scholar
  5. Keynes, J. M. (1939), ‘Relative Movements of Real Wages and Output’, Economic Journal, 49 (March), pp. 34–51.CrossRefGoogle Scholar
  6. Meltzer, A. H. (1981), ‘Keynes’s General Theory,: A Different Perspective’, Journal of Economic Literature, 19(1), pp. 34–64.Google Scholar
  7. Patinkin, D. (1965), Money, Interest, anrf Prices, 2nd edn (New York: Harper & Row).Google Scholar
  8. Tuchscherer, T. (1979), ‘Keynes’s Model and the Keynesians: A Synthesis’, J. Post Keynesian Econ., (Summer), 7(4), pp. 96–109.CrossRefGoogle Scholar
  9. Weintraub, S. (1958), An Approach to the Theory of Income Distribution, (Philadel-phia: Chilton).Google Scholar

Copyright information

© Paul Davidson 1990

Authors and Affiliations

  • Louise Davidson

There are no affiliations available

Personalised recommendations