Capacity Utilization, Inflation, and Monetary Policy: The Duménil and Lévy Macro Model and the New Keynesian Consensus

Marc Lavoie and Peter Kriesler

Review of Radical Political Economics, 2007, vol. 39, issue 4, 586-598

Abstract: The article considers the adjustment toward long-run equilibrium within the Duménil and Lévy macro model, with modifications. Findings show that long-run convergence to fully adjusted positions with normal utilization is not achieved when a more realistic reaction function is proposed. Classical equilibrium occurs when a vertical Phillips curve is substituted, but the model is isomorphic to the “new consensus†model and to features of “new†endogenous growth theory. JEL classification: E12, E40, E52, E58

Keywords: monetary policy; central bank; inflation; capacity utilization; new Keynesian; Marxism (search for similar items in EconPapers)
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:sae:reorpe:v:39:y:2007:i:4:p:586-598

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