The paper reconsiders an influential model by Blanchard (1981) that extends the textbook ISLM framework by including among the financial assets, besides money and short-term bonds, also long-term bonds and equities. Aggregate demand is supposed to vary with Tobin's (average) q, rather than the...

This note considers Tobin's average Q in a framework where firms finance investment by equities and debt. The determination of its long-run equilibrium value Q° is based on positing equality of the loan rate and, adjusted for a risk premium, the return on equities. Q° can thus be characterized...

Legislative and implementation lags imply that substantial time evolves between when news arrives about fiscal changes and when the changes actually take place—time when households and firms can adjust their behavior. We identify two types of fiscal news—government spending using the Survey...

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...

Recensione in chiave comparata dei recenti volumi di Apps & Rees (2009) e Todorova (2009) in tema di economia della famiglia e di genere.

El propósito del presente documento es el de contribuir al debate en torno a la importancia de la política fiscal como una herramienta poderosa para la estabilización y el crecimiento económico, así como mostrar el hecho de que los déficits fiscales no son los responsables de la...