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T. W. Swan: “The Principle Of Effective Demand—A ‘Real Life’ Model”

In: Trevor Winchester Swan, Volume I

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  • Peter L. Swan

    (UNSW (Sydney))

Abstract

The volume of employment is given by the point of intersection between the Aggregate Demand Function and the Aggregate Supply Function … Given the propensity to consume and the rate of new investment, there will be one level of employment consistent with equilibrium; since any other level will lead to inequality between the aggregate demand price of output as a whole and its aggregate supply price—Full employ employment can only exist when, by accident or design, current investment provides an amount of demand just equal to the excess of the aggregate supply price of the output resulting from full employmentfull employment over what the community will choose to spend on consumption when it is fully employed.

Suggested Citation

  • Peter L. Swan, 2022. "T. W. Swan: “The Principle Of Effective Demand—A ‘Real Life’ Model”," Palgrave Studies in the History of Economic Thought, in: Trevor Winchester Swan, Volume I, chapter 0, pages 169-206, Palgrave Macmillan.
    • Handle: RePEc:pal:pshchp:978-3-031-13737-2_7
    DOI: 10.1007/978-3-031-13737-2_7
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