Beyond the Natural Rate: Stephen Marglin on the Instability of Market Economies

Michael Woodford

Journal of Economic Literature, 2024, vol. 62, issue 1, 294-316

Abstract: In Raising Keynes: A Twenty-First Century General Theory, Stephen A. Marglin offers a provocative reformulation of Keynes' theoretical framework, stressing the importance of modeling the dynamics of wage and price adjustment. This review explains and assesses Marglin's argument for the possibility of a persistent equilibrium in which goods and/or labor markets continue not to clear in the absence of active stabilization policy. It also compares Marglin's analysis with that of New Keynesian models, and shows that the two approaches are more similar than might be immediately evident.

JEL-codes: E12 E23 E24 E32 E41 E52 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1257/jel.20221712

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