IDEAS home Printed from https://ideas.repec.org/h/pal/intecp/978-0-230-27614-7_12.html
   My bibliography  Save this book chapter

Aggregate Demand, Employment and Equilibrium with Marginal Productivity: Keynesian Adjustment in the Craft Economy

In: Keynes’s General Theory After Seventy Years

Author

Listed:
  • Edward J. Nell

Abstract

Most Post Keynesians have approached the idea that marginal productivity accounted for the demand for labor with caution and skepticism; some, like Paul Davidson and Victoria Chick, have accepted it with reservations. None of them, however, have thought that the account was illuminating or that supply and demand for labor determined employment and real wages. Ingrid Rima, for example, insists that the behavior of the labor market is chiefly determined by institutions, while Davidson and Chick have tried to accommodate Keynes’s insistence that the real wage did equal the marginal product of labor, even in less than full-employment equilibrium. All agree that Keynes’s approach recast the argument in money rather than real terms, rejecting the Classical Dichotomy. But if the market operates with money wages, how exactly does the real wage adjust to the marginal product? If the real wage adjusts in the labor market, why is full employment not established? And when there is unemployment in “equilibrium,” why is it so deep and persistent?

Suggested Citation

  • Edward J. Nell, 2010. "Aggregate Demand, Employment and Equilibrium with Marginal Productivity: Keynesian Adjustment in the Craft Economy," International Economic Association Series, in: Robert W. Dimand & Robert A. Mundell & Alessandro Vercelli (ed.), Keynes’s General Theory After Seventy Years, chapter 11, pages 197-221, Palgrave Macmillan.
    • Handle: RePEc:pal:intecp:978-0-230-27614-7_12
    DOI: 10.1057/9780230276147_12
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:intecp:978-0-230-27614-7_12. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.