Economics, Econometrics and Finance
8 years ago

Keynesian theory debunked: Markets can't reach full employment equilibrium.

1 view
Walrasian and Keynesian Adjustment Mechanisms
Rosalind Levačić, Alexander Rebmann

Paper Summary

The neoclassical-Keynesian synthesis reconciled Keynes's theory with the neoclassical school by showing that markets struggle to reach full-employment equilibrium when prices, especially wages, are inflexible.

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