Imperfect competition and the trade cycle: guidelines from the late thirties

It is the study of the trade cycle during the thirties that made imperfectly competitive output markets a major theme in macroeconomics, principally under the lead of Harrod. Both him and Keynes were referring at the same time to a supposed feature of business cycles, namely the counter cyclicality of real wages, which was however going to be very soon contested. Empirical evidence, as well as other more speculative considerations, induced an important flow of theoretical arguments developed byseveral authors during a very short period, at the eve of the second World War. We propose to examine these aborted guidelines already exhibiting the main ingredients of the New Keynesian research programme only developed one half century later: imperfectly competitive goods markets (with costly price adjustment, economies of scale and cyclical behaviour of markups), imperfectly competitive labour markets (with wage negotiations, implicit contracts and efficiency wages), and finally coordination failures.