Labor market in Keynes and the role of rigid nominal wages

Selene Peres Peres Nunes () and Ricardo da Costa Nunes ()

Brazilian Journal of Political Economy, 1997, vol. 17, issue 3, 428-443

Abstract: This paper discusses the statement that the Keynesian Theory would be “a particularcase of the Classical Theory with rigid wages”. It examines whether Keynesian analysisdepends on the rigidity hypothesis and to what extent the referred hypothesis has actuallybeen used in The General Theory. The Neoclassical Labor Market is criticized. The KeynesianTheory of Employment, the Pigou’s Reply and the Neoclassical Synthesis are also examined.The analysis of the method applied in the General Theory of Employment, Interestand Money – a static method of a dynamic process – leads to the conclusion that its ideasrepresented a complete revolution on the economic thought prevailing before its publication. JEL Classification: B22; B31; E12.

Keywords: Keynesianism; wage determination; wage rigidity; history of economic thought; equilibrium (search for similar items in EconPapers)
Date: 1997
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