Both New Classical and New Keynesian macroeconomic theorists misunderstand and distort old Keynesian economics, alleging that its diagnoses and prescriptions depend on the indefensible assumption that money wages and prices are "rigid." Here it is argued that all Keynesian macro requires is that...

Macroeconomic models incorporating multiple equilibriums are gaining popularity and seem to have a strong intuitive appeal. This paper explains the notion of coordination failure in macroeconomics and introduces the papers in this conference volume. It also addresses sunspot equilibrium theory...

This paper develops a real-exchange production-coordination model in which price-setting firms produce complementary inputs that are converted into and traded for a final good produced by a competitive sector. A rigid real-price regime is shown to be consistent with both rational firm behavior...

This paper provides an understanding for the emergence of the new non-neoclassical paradigm considered as Neo-Ricardian Economics. There is a look at two overall events that seemed to propel the move to putting Growth Economics at the core of what Economics is about. The reader is treated to the...

This paper uses the AS/AD framework to illustrate competing approaches to (i) the dynamics of short run price-output adjustment, and (ii) the employment effects of nominal wage reductions. Nominal wages affect equilibrium outcomes if AD is subject to Pigou or Fisher debt effects. The Kaleckian...

It has been argued that aggregate-supply/aggregate-demand (AS/AD) models suffer from an inconsistency because they assume that firms set price and adjust quantity for the AD curve and are profit-maximizing price takers for the AS curve. It is shown that this inconsistency is rife in intermediate...

Paul Davidson is one the best known and influential Post Keynesian economists alive today. He has insisted throughout his career that economists should focus on real world problems and that the purpose of economic policy is to help society become more humane and civilized. He is also known for...

This paper argues that Keynes's "theory of effective demand" merely restates in outwardly novel aggregative terms ideas that are part and parcel of "classical theory," and so adds nothing of substance to orthodox doctrine. The aim of the paper is to impugn neither The General Theory nor...

The aggregate-supply/ aggregate-demand (AS-AD) model is popular in textbooks, but has problems with logical consistency. In one interpretation, the Keynesian underpinnings of the AD curve-derived from the IS/LM model with downward price stickiness-conflict with the determination of the price...