Macroeconomics of Rationing Equilibria

Giuseppe Chirichiello
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Giuseppe Chirichiello: University ‘La Sapienza’

Chapter 5 in Macroeconomic Models and Controversies, 1994, pp 179-215 from Palgrave Macmillan

Abstract: Abstract From a Keynesian point of view, the assertion that policy is neutral decrees the failure of a scientific programme that could also explain every possible level of employment, not only natural full employment. The debate between schools highlights this failure because it forces us to consider the n.c.m. as the final stage of a gradual process which started with the Keynesian principle of effective demand and ended with the monetarist natural rate of unemployment. Moreover, the natural-rate-of-unemployment hypothesis precludes the concept of involuntary unemployment, so the very existence of unemployment equilibrium becomes debatable and policy invariance appears to be a mere variation on the theme of the natural rate of unemployment.

Keywords: Real Wage; Rational Expectation; Macroeconomic Model; Rationing Equilibrium; Walrasian Equilibrium (search for similar items in EconPapers)
Date: 1994
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-37106-4_6

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DOI: 10.1057/9780230371064_6

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