Macro‐economics and Equilibrium in the Commodity Market
This note shows that much conventional macro‐economic literature uses two inconsistent definitions of equilibrium in the commodity market. Equilibrium is defined as income equalling expenditure when deriving the IS curve; but when overall equilibrium is treated the requirement for equilibrium is that planned supply equals planned demand. The note shows that these inconsistent definitions lead to a confusing and often erroneous exposition of disequilibrium behaviour.
Year of publication: |
1980
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Authors: | Demery, L. ; Phelps, M. |
Published in: |
Journal of Economic Studies. - MCB UP Ltd, ISSN 1758-7387, ZDB-ID 1480042-1. - Vol. 7.1980, 3, p. 179-187
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Publisher: |
MCB UP Ltd |
Saved in:
Online Resource
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