THE DEMAND FOR COMMODITIES AND THE SUPPLY OF LABOR

Jagdish Handa

Chapter 5 in A Reformulation of Keynesian Economics, 2015, pp 225-281 from World Scientific Publishing Co. Pte. Ltd.

Abstract: The preceding chapters established the relevance of the aggregate demand (AD) for commodities in the short terms composing the planning period. This chapter examines the determination of this demand and of labor supply in the context of the overall framework laid out in the preceding chapters for our reformulation of Keynesian economics. The starting point of this approach, just as for firms in Chapter 3, is to assume that the economic agent plans intertemporally for the short terms up to his planning horizon, with the period up to this horizon referred to as the “long term.” Further, just as for our analysis of the firm, the duration of this planning period is chosen by the household on the basis of his specific context, lifestage and availability of information on the future, etc. In practice, this duration tends to be only a few years or so, but definitely less than a lifetime, so that there are likely to be a sequence of plans over a lifetime. Further, in the economy as a whole, the planning periods of both firms and households are likely to be staggered, with most of the plans arrived at in earlier periods…

Keywords: Macroeconomics; Keynesian Economics; Monetary Economics (search for similar items in EconPapers)
Date: 2015
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