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Frederic Lee and post-Keynesian pricing theory


  • Marc Lavoie

    (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique, University of Ottawa [Ottawa])


Frederic Lee has been a major contributor to post-Keynesian economics, mainly to its theory of pricing. This article summarizes his objections to the neoclassical view of the firm and pricing, as well as his view that changes in quantities, rather than in prices, provide the important information to firms. It also outlines Lee's views on competition, and examines the three pricing doctrines Lee carefully analyzed—markup pricing (associated with Kalecki), normal-cost pricing or full-cost pricing (associated with Andrews), and target-return or administered pricing (associated with Means). The article then discusses the relationship between Lee and three strands of post-Keynesianism: Kaleckian, Sraffian and Eichnerian pricing theories. It explains why Lee objected to some features of each of these. The article concludes by discussing why, towards the end of his life, Lee felt (mistakenly) that his ideas had been dismissed by heterodox economists.

Suggested Citation

  • Marc Lavoie, 2016. "Frederic Lee and post-Keynesian pricing theory," Post-Print hal-01343753, HAL.
  • Handle: RePEc:hal:journl:hal-01343753
    DOI: 10.1080/09538259.2016.1149375
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    References listed on IDEAS

    1. Thomas I. Palley, 2013. "Gattopardo economics: the crisis and the mainstream response of change that keeps things the same," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 10(2), pages 193-206.
    2. Thomas I. Palley, 1997. "The Academic Jungle: Social Practice and the Survival of Economic Ideas," Review of Radical Political Economics, Union for Radical Political Economics, vol. 29(3), pages 22-33, September.
    3. Frederic S. Lee, 2011. "The Pluralism Debate in Heterodox Economics," Review of Radical Political Economics, Union for Radical Political Economics, vol. 43(4), pages 540-551, December.
    4. Marc Lavoie, 2011. "La enseñanza de Economía post-Keynesiana en un departamento ortodoxo," Revista de Economía Crítica, Asociación de Economía Crítica, vol. 12, pages 180-198.
    5. David Colander, 2001. "An Interview with Paul Davidson," Eastern Economic Journal, Eastern Economic Association, vol. 27(1), pages 85-114, Winter.
    6. Matías Vernengo, 2010. "Conversation or monologue? on advising heterodox economists," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 32(3), pages 389-396, April.
    7. Leonhard Dobusch & Jakob Kapeller, 2012. "A Guide to Paradigmatic Self-Marginalization: Lessons for Post-Keynesian Economists," Review of Political Economy, Taylor & Francis Journals, vol. 24(3), pages 469-487, July.
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