A look at the background to Keynes' validation of the IS-LM model

Un retour sur les dessous de la validation par Keynes du modèle IS-LM

Nicolas Piluso ()

Post-Print from HAL

Abstract: The purpose of this article is to revisit the Hicks-Keynes controversy over the ISLM model. We propose an alternative and complementary explanation to Keynes's claim that he validates Hicks's work, even though post-Keynesians as a whole have rejected it. The usual analysis of this controversy concerns the theory of the interest rate. We show that if Keynes accepts the ISLM model, it is because it is consistent with the core of the General Theory, which bases involuntary unemployment on the rejection of the "second classical postulate" and the principle of effective demand. The latter make employment a variable determined outside the labor market like Hicks' ISLM model.

Keywords: Chômage involontaire; ISLM; Postulats classiques; Préférence pour la liquidité; Taux d’intérêt; Involuntary unemployment; Classical postulates; Preference for liquidity; Interest rate (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Published in Revue d'histoire de la pensée économique, 2024, 1 (17), p. 159-185. ⟨10.48611/isbn.978-2-406-17116-4.p.0159⟩

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:hal:journl:hal-03826062

DOI: 10.48611/isbn.978-2-406-17116-4.p.0159

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().