Disequilibrium Macroeconomics: From Its Brief Ascent to the Rapid Decline

Lefteris Tsoulfidis ()

Chapter Chapter 12 in Competing Schools of Economic Thought, 2009, pp 287-300 from Springer

Abstract: Abstract The neoclassical synthesis prevailed for decades as the authentic interpretation of Keynes. This dominance is attributed, on the one hand, to the simplicity of the presentation of Keynesian ideas and, on the other hand, to the provision of the necessary rationale for the contemplation of fiscal and monetary policy. The neoclassical synthesis (of Hicks, Samuelson and Modigliani) was considered the true general theory, as it could be applied to any stage of the business cycle and not only during depressions, as the General Theory of Keynes. The depressions are caused either by rigid money wages, or because the rate of interest is in the liquidity trap region, or, perhaps even worse, a combination of rigidity of money wages and liquidity trap-interest rate. But once the economy is at its full employment stage, through appropriate government intervention, then the system operates in accordance with the (neo)classical theory.

Keywords: Labour Market; Equilibrium Price; Excess Demand; Nominal Wage; Excess Supply (search for similar items in EconPapers)
Date: 2009
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-540-92693-1_12

Ordering information: This item can be ordered from
http://www.springer.com/9783540926931

DOI: 10.1007/978-3-540-92693-1_12

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().