Being Keynesian in the Short Term and Classical in the Long Term: The Traverse to Classical Long‐Term Equilibrium

Gérard Duménil and Dominique Lévy

Manchester School, 1999, vol. 67, issue 6, 684-716

Abstract: We analyse the relationship between the Keynesian (post‐Keynesian, Kaleckian) and classical perspectives, emphasizing the distinction between two time frames, short term and long term. A model is presented in which the traverse to a long‐term classical equilibrium, with prices of production, is obtained as a sequence of short‐term Keynesian equilibria (in which outputs are adjusted to demands). In the short term, prices and capital stocks are constant; they are only adjusted in the long term. Prices respond to disequilibria concerning capacity utilization rates. Investment is subject to a financing constraint, in which the provision of loans by the banking system is involved. Loans are modified in response to inflation (monetary policy).

Date: 1999
References: Add references at CitEc
Citations: View citations in EconPapers (45)

Downloads: (external link)
https://doi.org/10.1111/1467-9957.00175

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:manchs:v:67:y:1999:i:6:p:684-716

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1463-6786

Access Statistics for this article

Manchester School is currently edited by Keith Blackburn

More articles in Manchester School from University of Manchester Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery (contentdelivery@wiley.com).