Stochastic Macroequilibrium: A Microfoundation for Keynesian Economics

Hiroshi Yoshikawa ()
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Hiroshi Yoshikawa: University of Tokyo

Chapter Chapter 3 in Reconstruction of Macroeconomics: Methods of Statistical Physics, and Keynes' Principle of Effective Demand, 2022, pp 51-96 from Springer

Abstract: Abstract This chapter provides Keynes’ principle of effective demand with a solid microfoundation based on statistical physics. The matching function in labor markets is usually taken as determined by supply factors. However, the level of aggregate demand, which changes much more swiftly than technology conditions, matches workers and firms and thereby determines the distribution of productivity or the effective utilization of labor and, accordingly, the level of output in the macroeconomy.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advchp:978-981-19-5264-7_3

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DOI: 10.1007/978-981-19-5264-7_3

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