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Michaël Assous

Cahiers d’économie politique / Papers in Political Economy, 2008, issue 54, 7-26

Abstract: The present study centres on Meade's Simplified Keynesian Model (1937) presented in 1936. The objective of this paper is to show that Meade's model foreshadows the studies (Kalecki (1944), Tobin (1975)) which refute wage rigidity as the benchmark between Keynesian and Classical models. In particular, developing upon Peter Rappoport's paper (1992), we show Meade's model, by emphasising the role and the nature of expectations displays cases in which falling money wages decrease employment. The first section relates Meade's expectation treatment to Keynes discussion of investment. The analysis then shows Meade's model can be interpreted as a response to a critique Kalecki made in his 1936 review of the General Theory that Meade certainly did not know. Section II and III then show this model allows displaying cases in which, starting from an unstable position of unemployment equilibrium with fixed money wages, falling money wages are accompanied by falling output

JEL-codes: B22 E12 (search for similar items in EconPapers)
Date: 2008
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Handle: RePEc:cpo:journl:y:2008:i:54:p:7-26