Keynes's Treatise : aggregate price theory for modern analysis?
The paper explores the theory of the aggregate price, profit, and business fluctuations in Keyne's Treatise for its implications for modern macro-economic analysis. As in the Treatise, profits are first defined within a theory of the agregate price level, as aggregate investment minus saving. Deriving aggregate total revenue and aggregate total cost from this price theory, the paper shows how to construct a version of the Keynesian cross diagram. The cross construction suggests an important qualification for fiscal policy, that total cost does not shift. Then, using a neoclassical definition of profit and the total-cost / total-revenue approach, the paper derives aggregate supply, and then adds aggregate demand in an integrated framework. Comparative statics of the AS-AD analysis and the central role of profit in the Treatise suggest that a focus on profit might be useful in identifying exogenous technology shocks of real business cycle theory.
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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 9 (2002)
Issue (Month): 3 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/REJH20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/REJH20|
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.:
- Nevile, J W & Rao, B Bhaskara, 1996.
"The Use and Abuse of Aggregate Demand and Supply Functions,"
The Manchester School of Economic & Social Studies,
University of Manchester, vol. 64(2), pages 189-207, June.
- Neville, J. & Rao, B.B., 1991. "The Use and Abuse of Aggregate Demand and Supply Functions," Papers 91-16, New South Wales - School of Economics.
- John King, 1993.
"Aggregate Supply and Demand Analysis Since Keynes: A Partial History,"
1993.16, School of Economics, La Trobe University.
- John King, 1993. "Aggregate Supply and Demand Analysis Since Keynes: A Partial History," Working Papers 1993.16, School of Economics, La Trobe University.
- David Colander, 1995. "The Stories We Tell: A Reconsideration of AS/AD Analysis," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 169-188, Summer.
- Daniel R. Fusfeld, 1985. "Keynes and the Keynesian cross: a note," History of Political Economy, Duke University Press, vol. 17(3), pages 385-389, Fall.
- Mankiw, N Gregory, 1989.
"Real Business Cycles: A New Keynesian Perspective,"
Journal of Economic Perspectives,
American Economic Association, vol. 3(3), pages 79-90, Summer.
- William Darity, Jr. & Warren Young, 1995. "IS-LM: An Inquest," History of Political Economy, Duke University Press, vol. 27(1), pages 1-41, Spring.
- Taylor, John B., 1993. "Discretion versus policy rules in practice," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 39(1), pages 195-214, December.
- Robert Dimand, 1988. "The Origins of the Keynesian Revolution," Books, Edward Elgar Publishing, number 139, April.
- Topel, Robert H & Rosen, Sherwin, 1988. "Housing Investment in the United States," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 718-40, August.
- Harberger, Arnold C, 1998. "A Vision of the Growth Process," American Economic Review, American Economic Association, vol. 88(1), pages 1-32, March.
When requesting a correction, please mention this item's handle: RePEc:taf:eujhet:v:9:y:2002:i:3:p:430-451. 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: (Michael McNulty)
If references are entirely missing, you can add them using this form.