The Keynesian nexus between the market for goods and the labour market

Marco Guerrazzi

International Review of Economics, 2023, vol. 70, issue 2, No 3, 195-216

Abstract: Abstract In this paper, I build on the Keynesian analysis of the market for goods to draw some implications on the dynamic behaviour of some typical labour market indicators. Specifically, focusing on real magnitudes and distinguishing between the aggregate expected demand function and the aggregate expenditure function, I discuss the implied “daily” adjustments of expected and actual real wages that allow to achieve a short-run equilibrium. In addition, in order to show that the suggested picture of market for goods does not require a distinct setting to describe the transactions of labour services, I offer a rationale for equilibrium unemployment due to deficient demand grounded on the searching-and-matching theory.

Keywords: Keynesian economics; Expected demand; Expenditure function; Aggregate supply (search for similar items in EconPapers)
JEL-codes: E12 E24 J31 J64 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s12232-023-00415-w

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