Advanced Search
MyIDEAS: Login

Explaining the Aggregate Price Level with Keynes’s Principle of Effective Demand

Contents:

Author Info

Abstract

The conventional wisdom about Keynes’s Principle of Effective Demand is that it states something about quantities. It is widely held that the Principle determines the levels of output and employment in a world not governed by Say’s Law. This paper argues that the Principle of Effective Demand goes beyond this to explain not only ‘real’ activity levels but also the aggregate price level. A variant of the Post Keynesian D/Z-model is brought together with Marxian reproduction schemes to derive this result.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.kof.ethz.ch/publications/science/pdf/wp_95.pdf
Download Restriction: no

Bibliographic Info

Paper provided by KOF Swiss Economic Institute, ETH Zurich in its series KOF Working papers with number 04-95.

as in new window
Length: 24 pages
Date of creation: Nov 2004
Date of revision:
Handle: RePEc:kof:wpskof:04-95

Contact details of provider:
Postal: Weinbergstrasse 35, CH-8092 Zürich
Phone: +41 44 632 41 28
Fax: +41 44 632 12 18
Email:
Web page: http://www.kof.ethz.ch
More information through EDIRC

Related research

Keywords: Effective demand; multiplier; Post Keynesianism; D/Z-model; reproduction schemes;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Davidson, Paul, 1972. "Money and the Real World," Economic Journal, Royal Economic Society, vol. 82(325), pages 101-15, March.
  2. Hicks, J. R., 1987. "Methods of Dynamic Economics," OUP Catalogue, Oxford University Press, number 9780198772873.
  3. Tony Thirlwall, 1998. "A 'Second Edition' of Keynes's General Theory," Studies in Economics 9820, Department of Economics, University of Kent.
  4. Dutt, Amitava Krishna, 1987. "Keynes with a Perfectly Competitive Goods Market," Australian Economic Papers, Wiley Blackwell, vol. 26(49), pages 275-93, December.
  5. John King, 1993. "Aggregate Supply and Demand Analysis Since Keynes: A Partial History," Working Papers 1993.16, School of Economics, La Trobe University.
  6. Victoria Chick, 1983. "Macroeconomics after Keynes: A Reconsideration of the General Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262530457, December.
  7. E. Roy Weintraub, 1974. "Keynes' Employment Function," History of Political Economy, Duke University Press, vol. 6(2), pages 162-164, Summer.
  8. Claude Gnos, 2004. "Is ex-ante ex-post analysis irrelevant to Keynes's theory of employment?," Review of Political Economy, Taylor & Francis Journals, vol. 16(3), pages 335-345.
  9. Gilbert Koenig, 1980. "Les fondements microéconomiques du principe de la demande effective," Revue Économique, Programme National Persée, vol. 31(3), pages 430-464.
  10. Casarosa, Carlo, 1981. "The Microfoundations of Keynes's Aggregate Supply and Expected Demand Analysis," Economic Journal, Royal Economic Society, vol. 91(361), pages 188-94, March.
  11. Palley, Thomas I, 1997. "Expected Aggregate Demand, the Production Period and the Keynesian Theory of Aggregate Supply," The Manchester School of Economic & Social Studies, University of Manchester, vol. 65(3), pages 295-309, June.
  12. Jochen Hartwig, 2004. "Keynes's multiplier in a two-sectoral framework," Review of Political Economy, Taylor & Francis Journals, vol. 16(3), pages 309-334.
  13. Giuseppe Fontana, 2004. "Hicks on monetary theory and history: money as endogenous money," Cambridge Journal of Economics, Oxford University Press, vol. 28(1), pages 73-88, January.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Jochen Hartwig, 2009. "D and Z in ROPE – Will the Real Keynes Please Stand Up?," KOF Working papers 09-243, KOF Swiss Economic Institute, ETH Zurich.
  2. M. G. Hayes, 2008. "Keynes's Z function: a reply to Hartwig and Brady," Cambridge Journal of Economics, Oxford University Press, vol. 32(5), pages 811-814, September.
  3. Jochen Hartwig, 2014. "“Relative Movements of Real Wages and Output” – How does Keynes’s 1939 essay relate to his Principle of Effective Demand?," KOF Working papers 14-355, KOF Swiss Economic Institute, ETH Zurich.
  4. Jochen Hartwig, 2013. "Effective Demand: Securing the Foundations," Review of Political Economy, Taylor & Francis Journals, vol. 25(4), pages 672-678, October.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:kof:wpskof:04-95. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.