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Title:Explaining the aggregate price level with Keynes's principle of effective demand PDF Logo
Authors:Hartwig, Jochen
Issue Date:2004
Series/Report no.:Arbeitspapiere // Konjunkturforschungsstelle, Eidgenössische Technische Hochschule Zürich 95
Abstract:The conventional wisdom about Keynes's Principle of Effective Demand is that it states something about quantities. It is widely held that the Principle determines the levels of output and employment in a world not governed by Say's Law. This paper argues that the Principle of Effective Demand goes beyond this to explain not only real activity levels but also the aggregate price level. A variant of the Post Keynesian D/Z-model is brought together with Marxian reproduction schemes to derive this result.
Subjects:Effective demand
Post Keynesianism
reproduction schemes
Document Type:Working Paper
Appears in Collections:KOF Working Papers, KOF Konjunkturforschungsstelle, ETH Zürich

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