The Keynesian nexus between the market for goods and the labour market

Marco Guerrazzi

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper, I build on the Keynesian analysis of the market for goods to draw some implications on the behaviour of some typical labour market magnitudes. Specifically, without invoking the assumption of constant nominal wages but making instead the distinction between the aggregate expected demand function and the aggregate expenditure function, I discuss the implied "daily" adjustments of expected and actual real wages that allow to achieve a short-run equilibrium. In addition, I offer a microfoundation for equilibrium unemployment due to deficient demand grounded on modern searching-and-matching theory.

Keywords: Keynesian economics; expected demand; expenditure function; aggregate supply (search for similar items in EconPapers)
JEL-codes: E12 E24 J31 J64 (search for similar items in EconPapers)
Date: 2022-11-22
New Economics Papers: this item is included in nep-pke
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Journal Article: The Keynesian nexus between the market for goods and the labour market (2023)
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