Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/110029
Authors: 
Kakarot-Handtke, Egmont
Year of Publication: 
2013
Series/Report no.: 
Working Paper, Levy Economics Institute 773
Abstract: 
Keynes had many plausible things to say about unemployment and its causes. His "mercurial mind", though, relied on intuition, which means that he could not strictly prove his hypotheses. This explains why Keynes's ideas immediately invited bastardizations. One of them, the Phillips curve synthesis, turned out to be fatal. This paper identifies Keynes's undifferentiated employment function as a sore spot. It is replaced by the structural employment function, which also supersedes the bastard Phillips curve. The paper demonstrates in a formal and rigorous manner why there is no trade-off between price inflation and unemployment.
Subjects: 
New Framework of Concepts
Structure-centric
Axiom Set
Say's Regime
Keynes's Regime
Market Clearing
Full Employment
Product Price Flexibility
Intertemporal Budget Balancing
Multiplier
Trade-Off
Price Inflation
Wage Inflation
JEL: 
E12
E24
Document Type: 
Working Paper

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