Profit-rate equalization in the Kalecki-Steindl model and the 'overdetermination' problem
Article Abstract:
Park has discovered an 'over-determination' problem in Kalecki-Steindl models. This is because he has incorrectly included the classical result of the profit equalization rate between sectors and has not included a mechanism for this result to be achieved. The 'over-determination' problem is no longer apparent if this mechanism is included. Park has, however, contributed to our understanding of long-run equilibria and so helped expalin why long-run equilibria is not inconsistent with undesired excess capacity.
Publication Name: The Manchester School of Economic and Social Studies
Subject: Social sciences
ISSN: 0025-2034
Year: 1997
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The use and abuse of aggregate demand and supply functions
Article Abstract:
The ISLM graph, which represents aggregate demand and supply functions in economics textbooks, has several weaknesses as it often uses contradictory assumptions. The most serious problem arises when ISLM is used into a model with a long-run full employment equilibrium. The aggregate demand curve is based on the assumption that the labor market is a fix price market. However, a contradictory assumption of the aggressive supply curve holds the market to be a flex price one.
Publication Name: The Manchester School of Economic and Social Studies
Subject: Social sciences
ISSN: 0025-2034
Year: 1996
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