General Keynesian Macroeconomics : An Analysis Based on Hoarding

Macroeconomics deals with the household and the firm through the automatic mechanism of aggregate demand and aggregate supply until and unless demand deadlock or supply side rigidities affect. In these cases of demand deadlocks and supply side rigidities, intervention seems to be a general solution. However, that does not mean that it is a complete failure of the automatic mechanism., because, even in these demand deadlock and supply side rigidity situations, the automatic mechanism may revive through the asset market operations. Hoarding plays a pivotal role in determining the direction of expansion of aggregate demand