Despite the most common interpretation of John Hicks´s formalization of the General Theory that it was mainly oriented to achieve "mathematical elegance", this paper shows that Hicks´s results are based on theoretical arguments and specific causality relations. Hicks acknowledges the importance of the "liquidity preference doctrine" and examines the effects of investment on income (the multiplier) as well as the effects of income on investment (the accelerator). Our interpretation of Hicks´s formulation and especially of the role of the rate of interest rate in his paper avails the understanding of the success of the so-called "neoclassical synthesis".
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
3286.
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Find related papers by JEL classification: B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics B2 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925
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Fabiana Borges Teixeira dos Santos & Frederico Gonzaga Jayme Júnior, 1991.
"IS-LM: uma leitura crítica a partir de Keynes,"
Nova Economia,
Economics Department, Universidade Federal de Minas Gerais (Brazil), vol. 2(1), pages 149-168, August.