Keynes and the Classics

Giuseppe Chirichiello
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Giuseppe Chirichiello: University ‘La Sapienza’

Chapter 1 in Macroeconomic Models and Controversies, 1994, pp 4-54 from Palgrave Macmillan

Abstract: Abstract Neoclassical theory is basically a theory of prices and efficient allocation of resources. Before the Keynesian revolution it did not include a theory of national income and employment. According to Keynes (Keynes, 1936), the neoclassical view of national income and employment was best described as the tendency towards full employment which was demonstrated, or rather justified, by accepting Say’s law (Say, 1828). A popular version of this law asserts that ‘supply always creates its own demand’, meaning that, in general, there can be no overproduction.

Keywords: Labour Market; Interest Rate; Labour Supply; Real Wage; Aggregate Demand (search for similar items in EconPapers)
Date: 1994
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-37106-4_2

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DOI: 10.1057/9780230371064_2

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