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Capacity Utilization, Inflation, and Monetary Policy: The Duménil and Lévy Macro Model and the New Keynesian Consensus

Listed author(s):
  • Marc Lavoie

    (Department of Economics, University of Ottawa, Canada,

  • Peter Kriesler

    (University of New South Wales,

The article considers the adjustment toward long-run equilibrium within the Duménil and Lévy macro model, with modifications. Findings show that long-run convergence to fully adjusted positions with normal utilization is not achieved when a more realistic reaction function is proposed. Classical equilibrium occurs when a vertical Phillips curve is substituted, but the model is isomorphic to the “new consensus†model and to features of “new†endogenous growth theory. JEL classification: E12, E40, E52, E58

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Article provided by Union for Radical Political Economics in its journal Review of Radical Political Economics.

Volume (Year): 39 (2007)
Issue (Month): 4 (December)
Pages: 586-598

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Handle: RePEc:sae:reorpe:v:39:y:2007:i:4:p:586-598
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