The Comparative Statics of Effective Demand

Jochen Hartwig

Review of Political Economy, 2017, vol. 29, issue 3, 360-375

Abstract: Keynes introduces the term ‘effective demand’ in Chapter 3 of the General Theory as designating the point of intersection of two functions: the ‘aggregate demand function’ (D) and the ‘aggregate supply function’ (Z). For the first time in the literature, I here use specific functional forms for the D and Z functions and run numerical simulations which allow study of the comparative statics of the model in the face of various ‘shocks’. The demonstration of how the D/Z model actually works will hopefully prove useful for future students of the economics of Keynes.

Date: 2017
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Working Paper: The comparative statics of effective demand (2017)
Working Paper: The comparative statics of effective demand (2017)
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DOI: 10.1080/09538259.2017.1352191

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