Pro-Keynesian and Counter-Keynesian Implications of the ‘Structuralist’ Theory of Unemployment and Interest under the Classic Two-Sector View of Capital and Production

  • Edmund S. Phelps
Part of the Confederation of European Economic Associations Conference Volumes book series (CEEA)

Abstract

My recent work is directed toward a distinctive new paradigm that has been taking shape in the macroeconomic literature for more than a dozen years: a modern micro-macro theory of the simultaneous determination of the natural rate of unemployment and the natural rate of interest over time. It is a theory of how the equilibrium path — meaning the correct-expectations path — of the unemployment rate and the other real variables is disturbed by real demand and real supply shocks in the various markets.

Keywords

Europe Income Shrinkage Assure Posit 

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© Confederation of European Economic Associations 1993

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  • Edmund S. Phelps

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