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Effective Demand: Securing the Foundations

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  • Olivier Allain

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, UPD5 - Université Paris Descartes - Paris 5)

Abstract

This paper is one of three contributions to a symposium commenting on papers previously published by the other authors. My analysis of Chapter 3 of the General Theory is that it built a bridge between the entrepreneurs' behaviour at the microeconomic level and the closure of the system at the macroeconomic level. I agree with Hartwig (2007) in many respects. The main divergence between us concerns entrepreneurs' expectations, which can be related to the overall economic situation (Hartwig's interpretation) or to their own situation (my interpretation). Hayes (2007a), while he focused on overlapping production periods, proposes a detailed analysis of the entrepreneurs' behaviour. As a result, it seems to me that he doesn't focus enough on the system closure aspects of the principle of effective demand.

Suggested Citation

  • Olivier Allain, 2013. "Effective Demand: Securing the Foundations," Post-Print hal-00964275, HAL.
    • Handle: RePEc:hal:journl:hal-00964275
    DOI: 10.1080/09538259.2013.837331
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    References listed on IDEAS

    as
    1. Mark Hayes, 2007. "The Point of Effective Demand," Review of Political Economy, Taylor & Francis Journals, vol. 19(1), pages 55-80.
    2. Olivier Allain, 2009. "Effective Demand and Short-term Adjustments in the General Theory," Review of Political Economy, Taylor & Francis Journals, vol. 21(1), pages 1-22.
    3. Casarosa, Carlo, 1981. "The Microfoundations of Keynes's Aggregate Supply and Expected Demand Analysis," Economic Journal, Royal Economic Society, vol. 91(361), pages 188-194, March.
    4. Olivier Allain, 2009. "Effective demand and short-term adjustments in the General Theory," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00345891, HAL.
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    Cited by:

    1. M.G. Hayes, 2013. "Effective Demand: Securing the Foundations," Review of Political Economy, Taylor & Francis Journals, vol. 25(4), pages 661-671, October.
    2. Hein, Eckhard, 2015. "The principle of effective demand: Marx, Kalecki, Keynes and beyond," IPE Working Papers 60/2015, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    3. Jochen Hartwig, 2017. "The Comparative Statics of Effective Demand," Review of Political Economy, Taylor & Francis Journals, vol. 29(3), pages 360-375, July.
    4. Severin Reissl, 2015. "The return of black box economics - a critique of Keen on effective demand and changes in debt," IMK Working Paper 149-2015, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    5. Constantinos Repapis, 2020. "Book review: Mark G Hayes, John Maynard Keynes: The Art of Choosing the Right Model," The Economic and Labour Relations Review, , vol. 31(3), pages 470-476, September.

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    More about this item

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals

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