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Backhouse and Boianovsky on 'disequilibrium theory'. A review article of Transforming modern macroeconomics. Exploring disequilibrium microfoundations, 1956-2003

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  • Michel DE VROEY

    () (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

Abstract

In this review article of Backhouse and Boianovsky’s book, Transforming modern macroeconomics. Exploring disequilibrium microfoundations, 1956-2003, I make the following points: (a) Backhouse and Boianovsky’s too broad understanding of the disequilibrium approach results in their bringing together theories that should be kept separate. While the disequilibrium label fits the works of Patinkin, Clower and Leijonhuvud, it betrays the project of Barro and Grossman, Drèze and Benassy who strived at producing an equilibrium theory. (b) I put in question their claim that an inner link exists between disequilibrium and fixed price equilibrium theories and imperfect competition modeling. (c) I try to identify the deep nature of the controversy in which these authors were involved. (d) I put forward a few conjectures about the reason why fixed price modeling petered out.

Suggested Citation

  • Michel DE VROEY, 2014. "Backhouse and Boianovsky on 'disequilibrium theory'. A review article of Transforming modern macroeconomics. Exploring disequilibrium microfoundations, 1956-2003," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2014006, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  • Handle: RePEc:ctl:louvir:2014006
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    File URL: http://sites.uclouvain.be/econ/DP/IRES/2014006.pdf
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    References listed on IDEAS

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    1. De Vroey Michel & Duarte Pedro Garcia, 2013. "In search of lost time: the neoclassical synthesis," The B.E. Journal of Macroeconomics, De Gruyter, vol. 13(1), pages 1-31, January.
    2. Michel, DE VROEY, 2005. "Involuntary Unemployment : the Elusive Quest for a Theory," Discussion Papers (ECON - Département des Sciences Economiques) 2005004, Université catholique de Louvain, Département des Sciences Economiques.
    3. Oliver Hart, 1982. "A Model of Imperfect Competition with Keynesian Features," The Quarterly Journal of Economics, Oxford University Press, vol. 97(1), pages 109-138.
    4. Muellbauer, John & Portes, Richard, 1978. "Macroeconomic Models with Quantity Rationing," Economic Journal, Royal Economic Society, vol. 88(352), pages 788-821, December.
    5. Backhouse,Roger E. & Boianovsky,Mauro, 2014. "Transforming Modern Macroeconomics," Cambridge Books, Cambridge University Press, number 9781107435384, March.
    6. Diamond, Peter A, 1982. "Aggregate Demand Management in Search Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 90(5), pages 881-894, October.
    7. Anna Batyra & Michel De Vroey, 2012. "From One To Many Islands: The Emergence Of Search And Matching Models," Bulletin of Economic Research, Wiley Blackwell, vol. 64(3), pages 393-414, July.
    8. Michel De Vroey, 2012. "Marshall and Walras: Incompatible bedfellows?," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 19(5), pages 765-783, October.
    9. Michel De Vroey, 2007. "Did The Market-Clearing Postulate Pre-Exist New Classical Economics? The Case Of Marshallian Theory," Manchester School, University of Manchester, vol. 75(3), pages 328-348, June.
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    Keywords

    Disequilibrium theory; non-Walrasian equilibrium models; Keynesian macroeconomics;

    JEL classification:

    • B - Schools of Economic Thought and Methodology
    • E - Macroeconomics and Monetary Economics
    • E - Macroeconomics and Monetary Economics

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