Capital accumulation, technical progress and wage flexibility: Keynes´approach to aggregate supply and demand analysis revisited

Alfonso Palacio Vera
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Alfonso Palacio Vera: Departamento de Economía Aplicada, Pública y Política. Universidad Complutense de Madrid., https://www.ucm.es/eapp

No 03-12, Documentos de trabajo de la Facultad de Ciencias Económicas y Empresariales from Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales

Abstract: The aggregate supply and demand model (AS-AD) posited by Keynes in the General Theory and elaborated by Weintraub and Davidson is analysed by inserting a CES production function. We perform a comparative statics analysis where the effects on the equilibrium level of employment and the price level of changes in a wide range of variables and parameters are worked out. The effect of changes in the money wage rate on the level of employment and the price level are found to be ambiguous. Finally, we argue that this approach provides a more consistent approach than conventional AS-AD analysis does.

Keywords: Capital; Aggregate supply and demand analysis; Involuntary employment; Technical progress; Capital accumulation and deflation. (search for similar items in EconPapers)
Pages: 37 pages
Date: 2003
New Economics Papers: this item is included in nep-lab and nep-mac
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