Details

Autor(en) / Beteiligte

• Dumenil, G.
• Levy, D.

Titel

A reply to Amitava Dutt: the role of aggregate demand in the long run

Ist Teil von

• Cambridge journal of economics, 2014-09, Vol.38 (5), p.1285-1292

Ort / Verlag

Oxford: Oxford University Press

Erscheinungsjahr

2014

Quelle

Oxford Journals 2020 Social Sciences

Beschreibungen/Notizen

• In an article in this journal, Amitava Dutt comments on our 1999 paper, 'Being Keynesian in the Short Term and Classical in the Long Term: The Traverse to Classical Long-term Equilibrium', contending that aggregate demand may affect the long-term equilibrium. We agree to some extent but contend that these mechanisms do not question the fundamental difference between the classical-Marxian perspective (in which u gravitates in the long term around ū) and the post-Keynesian perspective (in which the long-term equilibrium position of u depends on the level of aggregate demand). The basic controversy harks back to Harrod's investment function, in which the only long-term equilibrium is u = ū. We solve the problem of Harrodian instability in reference to the action of monetary authorities and governments. Dutt's defence of the post-Keynesian investment function is unconvincing.