Oskar Lange and the influence of Walrasian theory during the Keynesian revolution
My paper examines how Lange integrated the Walrasian and the Keynesian ingredients in his research. I argue that his works proposed two kinds of macroeconomics. The first kind was IS-LM, but IS-LM interpreted as an aggregate version of Walras' general equilibrium model (Lange, 1938). The second kind was developed in Lange's 1944 book. There, macroeconomic became a subfield of stability analysis. The paper highlights Hicks' (1939) decisive influence on Lange. It shows that Value and Capital revealed to Lange how he could use the Walrasian framework to unveil the inherent instability of the capitalist system. This part of the paper help us assess Lange's achievements and his influence on the generation of Modigliani, Solow and Patinkin.
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- 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.
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- Goulven Rubin, 2012. "Don Patinkin's PhD Dissertation as the Prehistory of Disequilibrium Theories," History of Political Economy, Duke University Press, vol. 44(2), pages 235-276, Summer.
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"The Marshallian Market and the Walrasian Economy. Two Incompatible Bedfellows?,"
Discussion Papers (IRES - Institut de Recherches Economiques et Sociales)
1998004, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- De Vroey, Michel, 1999. "The Marshallian Market and the Walrasian Economy. Two Incompatible Bedfellows," Scottish Journal of Political Economy, Scottish Economic Society, vol. 46(3), pages 319-38, August.
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- Hans Neisser, 1934. "General Overproduction: A Study of Say's Law of Markets," Journal of Political Economy, University of Chicago Press, vol. 42, pages 433.
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