Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/122151
Authors: 
Hein, Eckhard
Year of Publication: 
2015
Series/Report no.: 
Working Paper, Institute for International Political Economy Berlin 60/2015
Abstract: 
The principle of effective demand, and the claim of its validity for a monetary production economy in the short and in the long run, is the core of heterodox macroeconomics, as currently found in all the different strands of post-Keynesian economics (Fundamentalists, Kaleckians, Sraffians, Kaldorians, Institutionalists) and also in some strands of neo-Marxian economics, particularly in the monopoly capitalism and underconsumptionist school In this contribution, we will therefore outline the foundations of the principle of effective demand and its relationship with the respective notion of a capitalist or a monetary production economy in the works of Marx, Kalecki and Keynes. Then we will deal with heterodox short-run macroeconomics and it will provide a simple short-run model which is built on the principle of effective demand, as well as on distribution conflict between different social groups (or classes): rentiers, managers and workers. Finally, we will move to the long run and we will review the integration of the principle of effective demand into heterodox/post-Keynesian approaches towards distribution and growth.
Subjects: 
effective demand
employment
distribution
growth
Marx
Kalecki
Keynes
JEL: 
E20
E21
E22
E24
E25
Document Type: 
Working Paper

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