The ideas for this study have been distilled from the simple proposition that an unregulated market economy is subject to recurrent phases of growth and stagnation. Yet for the neoclassical economist, these alternating phases of boom and slump merely reflect temporary disturbances, or exogenous shocks to the system. If left to its own devices, neoclassical theory asserts that the market economy will eventually gravitate back to its “normal” state of long-run equilibrium. The aim of this book is to debunk this conventional wisdom and to suggest that in the market economy, these recurrent crises are not only an inherent characteristic, but also tend to be more endemic and entrenched under the conditions of oligopolistic competition.
KeywordsPhillips Curve Neoclassical Theory Effective Demand Cumulative Causation Oligopolistic Competition
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