The paper compares different strands of New Keynesian Economics with respect to Keynes's original work on wages, describing which are the most relevant differences and analogies. In particular, two issues are analysed in detail. First, the explanations provided by Keynes and New Keynesians of nominal and real wages behaviour. Second, the different theories and interpretations concerning the ability of flexible nominal wages in assuring full employment in the economy. It is argued that, although persistent involuntary unemployment is acentral and continuing problem both in Keynes and New Keynesians views, referring to the role of nominal and/or real wages behaviour in explaining unemployment, New Keynesian theories present features which differ, sometimes substantially, from the ideas and concepts developed by Keynes in his General Theory.
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Paper provided by Dipartimento di Scienze Economiche (DSE), University of Pisa, Pisa, Italy in its series Discussion Papers with number
2004/41.
Find related papers by JEL classification: B20 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - General B40 - Schools of Economic Thought and Methodology - - Economic Methodology - - - General E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
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