Effective demand: Securing the foundations - A symposium
This Symposium consists of individual comments by three authors on papers previously published by the other two (Allain, 2009, Hartwig, 2007 and Hayes, 2007) on the topic of Keynes’s principle of effective demand as set out in The General Theory. The Symposium includes updated versions of PKSG working papers 1210, 1211 and 1212 together with an introduction by all three authors. As Allain puts it, there is a closure problem, in our understanding if not in The General Theory itself. Allain’s solution is to redefine effective demand so that it becomes the end point of a process of convergence of expectations on outcomes. Hartwig (following Chick, 1992, in particular) requires entrepreneurs to form a view about aggregate demand rather than simply their own industry price. Hayes retains Keynes’s definition of effective demand and price-taking firms but introduces a division of entrepreneurs between employers and dealers which is not explicit in Keynes’s text.
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- repec:pke:wpaper:pkwp1212 is not listed on IDEAS
- Casarosa, Carlo, 1981. "The Microfoundations of Keynes's Aggregate Supply and Expected Demand Analysis," Economic Journal, Royal Economic Society, vol. 91(361), pages 188-194, March.
- Olivier Allain, 2006.
"Effective demand and short-term adjustments in the General Theory,"
Cahiers de la Maison des Sciences Economiques
bla06018, Université Panthéon-Sorbonne (Paris 1).
- Olivier Allain, 2009. "Effective Demand and Short-term Adjustments in the General Theory," Review of Political Economy, Taylor & Francis Journals, vol. 21(1), pages 1-22.
- Mark Hayes, 2007. "The Point of Effective Demand," Review of Political Economy, Taylor & Francis Journals, vol. 19(1), pages 55-80.
- Kregel, J A, 1976. "Economic Methodology in the Face of Uncertainty: The Modelling Methods of Keynes and the Post-Keynesians," Economic Journal, Royal Economic Society, vol. 86(342), pages 209-225, June.
- Jochen Hartwig, 2007. "Keynes vs. the Post Keynesians on the Principle of Effective Demand," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 14(4), pages 725-739.
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