Keynes’s employment function and the gratuitous Phillips curve disaster

Egmont Kakarot-Handtke ()

MPRA Paper from University Library of Munich, Germany

Abstract: Keynes had a lot of plausible things to say about unemployment and its causes. His ‘mercurial mind’, though, relied on intuition which means that he could not prove his diverse opinions convincingly. This explains why Keynes’s ideas immediately invited bastardizations. One of them, the Phillips curve synthesis, proved to be fatal. This paper identifies Keynes’s undifferentiated employment function as weak spot. The structural employment function, on the other hand, works in inflationary and deflationary environments and supersedes the bastard Phillips curve. It will be rigorously demonstrated why there is no trade-off between price inflation and unemployment.

Keywords: new framework of concepts; structure-centric; axiom set; Say’s regime; Keynes’s regime; market clearing; full employment; product price flexibility; intertemporal budget balancing; multiplier; trade-off; price inflation; wage inflation (search for similar items in EconPapers)
JEL-codes: E12 E24 (search for similar items in EconPapers)
Date: 2012-12-06
New Economics Papers: this item is included in nep-lab, nep-mac and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Working Paper: Keynes's Employment Function and the Gratuitous Phillips Curve Disaster (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:43111

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