TITLE

Indeterminacy of macroeconomic equilibrium in a "Post Keynesian New Classical" model

AUTHOR(S)
Rosser Jr., J. Barkley
PUB. DATE
September 1991
SOURCE
Journal of Post Keynesian Economics;Fall91, Vol. 14 Issue 1, p111
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
This article examines a simple idea that under certain conditions, the neoclassical aggregate supply and aggregate demand curves could coincide. This would suggest a continuum of possible macroeconomic equilibrium, resulting in a severe indeterminacy. This result can be viewed as a manifestation of the well-known tendency for multiple equilibrium to crop up in linear rational expectations models. A final implication of this possibility of the coincidence of long-run vertical aggregate supply and demand curves is the revived relevance of the Keynesian-type short-run analysis so scorned by the New Classical.
ACCESSION #
12028481

 

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