“Relative Movements of Real Wages and Output”
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Author
Date
2014-03Type
- Working Paper
ETH Bibliography
yes
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Abstract
Keynes’s essay “Relative Movements of Real Wages and Output” is widely believed to be an important amendment to his General Theory because, in this essay, Keynes relaxed his core assumption of decreasing marginal returns to labour. Non-decreasing marginal returns, however, do not sit comfortably with the prime innovation of the General Theory: the Principle of Effective Demand. This will be demonstrated by performing – for the first time in the literature – numerical simulations with Keynes’s Aggregate-Demand-Aggregate-Supply (D/Z) model. The view that Keynes’s 1939 essay constitutes an important amendment to his General Theory thus has to be put into perspective. Show more
Permanent link
https://doi.org/10.3929/ethz-a-010111028Publication status
publishedJournal / series
KOF Working PapersVolume
Publisher
KOF Swiss Economic Institute, ETH ZurichSubject
D/Z model; KEYNESIANISM (ECONOMIC THEORIES); Marginal returns to labour; LABOUR ECONOMICS; DEMAND (ECONOMIC THEORY); NACHFRAGE (WIRTSCHAFTSTHEORIE); Effective demand; Keynes; KEYNESIANISMUS (WIRTSCHAFTSTHEORIEN); ARBEITSÖKONOMIE; REALLOEHNE; REAL WAGEOrganisational unit
02525 - KOF Konjunkturforschungsstelle / KOF Swiss Economic Institute
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ETH Bibliography
yes
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