Non-stabilizing Flexibility:From the Contributions By Keynes and Kalecki Towards a Post-Keynesian Approach
AbstractNew and old mainstream macroeconomics argues that price flexibility stabilizes the economy. After a decline in aggregate demand, the more rapid prices fall, the faster output returns to its full employment level. The theoretical basis for this result is the well known "Pigou effect". However both Keynes and Kalecki rejected the thesis that price flexibility, in a demand-induced recession, can be stabilizistabilizing. This paper seeks to contrast Keynes's and Kalecki's ideas with the mainstream and discuss and alternative approach in the spirit of the post-keynesian's debt-deflation school.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 3391.
Date of creation: 2006
Date of revision:
Publication status: Published in Studi Economici 1.88(2006): pp. 79-92
Non-stabilizing flexibily; Pigou effect: Fisher effect; Debt-deflation;
Other versions of this item:
- Lino Sau, 2006. "Non- Stabilizing Flexibility: from the Contributions by Keynes and Kalecki towards a Post-Keynesian Approach," STUDI ECONOMICI, FrancoAngeli Editore, vol. 2006(88), pages 79-92.
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-06-11 (All new papers)
- NEP-HPE-2007-06-11 (History & Philosophy of Economics)
- NEP-MAC-2007-06-11 (Macroeconomics)
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