 The Generalisation of the General TheoryJoan Robinson A chapter in The Generalisation of the General Theory and other Essays, 1979, pp 1-76 from Palgrave Macmillan Abstract: Abstract Keynes’ General Theory of Employment is an application to output as a whole of the analysis developed by Marshall of the short-period equilibrium of a particular industry. In a typical Marshallian short period, demand for a commodity (for example, fish1) has recently risen and is expected to remain at its new level. Output is limited for the time being by the existing capital equipment of the industry (trawlers). Competition prevails and the price of the commodity is equal to marginal costs to the firms concerned. Marginal costs are rising sharply as demand strains against the limits of capacity. Marginal cost, and therefore price, exceeds average cost, and profits (quasi-rents) stand at a level which causes the firms already in the industry to place orders for more capital equipment, and induces new firms to enter the market. This corresponds, when extended to output as a whole, to a situation where prospective profits are inducing a level of investment which keeps effective demand at a satisfactorily high level. Keywords: Wage Rate; Real Wage; National Income; Technical Progress; Capital Good (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-16188-1_1 Ordering information: This item can be ordered from DOI: 10.1007/978-1-349-16188-1_1 Access Statistics for this chapter More chapters in Palgrave Macmillan Books from Palgrave Macmillan |
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