Abstract

LIZARAZU ALANEZ, Eddy. The Algebraic model of J. E. Meade: A simplification of the economic system of Keynes. Inv. Econ [online]. 2001, vol.61, n.238, pp.69-107. ISSN 0185-1667.

The macroeconomics has ignored the analysis of Meade ( 1937), which captures the economic system of the General Theory of Keynes better. Only recently Darity-Cottrel (1987), Darity­ Young (1995), Rappoport (1992) and Young (1987) they have renewed an interest for the representation of Meade, but the analysis of Darity-Cottrel and Darity-Young it is based on a structure formed by production sectors with exogenous expectations, while the work of Rappoport is an advance in the analysis of stability of the equilibrium for a productive sector, but he leaves aside the case of two productive sectors. In consequence, the objective of this article is to show the role of the static expectations of long term underlying to the marginal efficiency of the capital as a fundamental ingredient for the algebraic representation of Keynes (1936) with two productive sectors. In particular, the expectations of long term in an environment of high 'volatility' can cause the no-convergence of the labor market toward the equilibrium of full employment. Indeed, Keynes understands that the monetary wage is determined in an exogenous way (that which doesn't mean that it is rigid), reason why if the monetary wage diminishes, the involuntary unemployment not necessarily disappears (a result possible of Keynes). Toe algebraic representation of Meade (1937) transcribes this result of Keynes, reason why it is better than the model SI/LL of Hicks (1937), which accepts the unemployment involuntary product of the salary rigidity and not of the principie of the effective demand.

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