Abstract
One of the fundamental purposes of Keynesian theory is to present a model of the economy where transactions take place at prices that do not achieve the equilibrium of supply and demand as the classics understood it. This implies that, in such a model, short-run adjustments must take place at least partly by quantity rationing instead of by price movements.
This work was sponsored by the Centre National de la Recherche Scientifique, Équipe de Recherche Fondamentale en Économie Mathèmatique (ERA No 507). Partial support from the Fond National Belge de la Recherche Scientifique is gratefully acknowledged while J. M. Grandmont was visiting CORE during the acedemic year 1972–3. We wish to thank J. P. Benassy, C. J. Bliss, G. Delange, J. Dréze, F. H. Hahn and A. P. Kirman for their perceptive comments and suggestions. The paper is printed in this volume by the kind permission of the editors of the Review of Economic Studies, in which journal and version appeared in February, 1976.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
K. J. Arrow and F. H. Hahn, General Competitive Analysis ( San Francisco: Holden-Day, 1971 ).
R. J. Barro and H. I. Grossman, ‘A General Disequilibrium Model of Income and Employ-ment’, American Economic Review, Vol. 60, No 1 (March 1971) pp. 82–93.
J. P. Benassy, ‘Disequilibrium Theory’, C.R.M.S. Working Paper (University of California,Ph.D. thesis, 1973 ).
J. P. Benassy, ‘Neo-Keynesian Disequilibrium Theory in a Monetary Economy’, Review of Economic Studies Vol. 42, No. 132 (October 1975) vv. 503–23.
R. W. Clower, ‘The Keynesian Counterrevolution: A Theoretical Appraisal’, in F. H. Hahn and F. P. R. Brechling (eds), The Theory of Interest Rates ( London: Macmillan, 1965 ).
G. Debreu, ‘Market Equilibrium’, Proceedings of the National Academy of Sciences of the U.S.A. (Chicago University Press, 1956 ).
G. Debreu, Theory of Value ( New York: John Wiley, 1959 ).
J. Drèze (ed), Allocation under Uncertainty, Equilibrium and Optimality, Proceedings of a workshop sponsored by the I.E.A. held in Bergen (London: Macmillan, 1974 ).
J. Drêze, ‘Existence of an Exchange Equilibrium under Price Rigidities’, International Economic Review, Vol. 16, No 2 (June 1975) pp. 301–20.
J. M. Grandmont, ‘On the Temporary Competitive Equilibrium’, C.R.M.S. Working Paper ( University of California, Ph.D. thesis, 1970 ).
J. M. Grandmont, ‘On the Short-Run Equilibrium in a Monetary Economy’ in J. Drêze (ed), Allocation under Uncertainty, Equilibrium and Optimality ( London: Macmillan, 1974 ).
J. M. Grandmont and G. Laroque, ‘On Money and Banking’, Review of Economic Studies, Vol. XLII (2), No 130 (April 1975) pp. 207–36.
J. R. Green, ‘Preexisting Contracts and Temporary General Equilibrium’, (Harvard UP, 1972 ).
J. R. Green, ‘Temporary General Equilibrium in a Sequential Trading Model with Spot and Futures Transactions’, Econometrica Vol. 41, No 6 (November 1973) pp. 110–323.
H. I. Grossman, ‘Money, Interest and Prices in Market Disequilibrium’, Journal of Political Economy, Vol. 80, No 2 (March/April 1972 ) pp. 223–55.
H. I. Grossman, ‘A Choice-theoretic Model of an Income Investment Accelerator’, American Economic Review, Vol. 62, No 3 (September 1972) pp. 630–41.
B. Hansen, A Study in the Theory of Inflation ( London: Allen & Unwin, 1951 ).
K. Iwai. Iwai, ‘The Firm in Uncertain Markets and Its Prices, Wage and Employment Adjust“C.R.M.S. Working Paper (University of California, 1972 ).
K. Iwai, ‘The Firm in Uncertain Markets and Its Prices, Wage and Employment Adjust-ments’, Review of Economic Studies, Vol. 41, No 126 (April 1974) pp. 257–76.
A. Leijonhufvud, On Keynesian Economics and the Economics of Keynes: A Study in Monetary Theory ( New York and London: Oxford University Press, 1968 ).
E. Malinvaud and Y. Younès, ‘Une Nouvelle Formulation Générale pour l’Étude des fondements Microéconomiques de la Macroéconomie’ ( Paris: INSEE-CEPREMAP, 1974 ).
F. Modigliani, ‘The Monetary Mechanism and Its Interaction with Real Phenomena’, Review of Economics and Statistics, Vol. LXLV, Supplement No 1, Part 2 (February 1963) pp. 79–107.
D. Patinkin, ‘Involuntary Unemployment and the Keynesian Supply Function’, Economic Journal, Vol. 59, No 225 (September 1949) pp. 360–83.
D. Patinkin, Money, Interest and Prices (New York: Harper & Row, 2nd ed., 1965 ).
R. M. Solow and J. E. Stiglitz, ‘Output, Employment and Wages in the Short Run’, Quarterly Journal of Economics, Vol. 82, No 4 (November 1968) pp. 537–60.
D. Sondermann, ‘Temporary Competitive Equilibrium under Uncertainty’, in J. Dréze(ed.) Allocation under Uncertainty, Equilibrium and Optimality ( London: Macmillan, 1974 ).
B. Stigum, ‘Competitive Equilibria under Uncertainty’, Quarterly Journal of Economics, Vol. 83, No 4 (November 1969) pp. 533–61.
B. Stigum, ‘Resource Allocation under Uncertainty’, International Economic Review, Vol. 13, No 3 (October 1972), pp. 431–59.
Y. Younès, ‘Sur une Notion d’Equi1ibre Utilisable dans le Cas ou les Agents Économiques ne sont pas assurés de la Compatibilite de Leurs Plans’, ( Paris: CEPREMAP, 1970 ).
Y. Younès, ‘On the Role of Money in the Process of Exchange and the Existence of a Non-Walrasian Equilibrium’, Review of Economic Studies, Vol. 42, No 132 (October 1975) pp. 489–501.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Copyright information
© 1977 The International Economic Association
About this chapter
Cite this chapter
Grandmont, JM., Laroque, G. (1977). On Temporary Keynesian Equilibrium. In: Harcourt, G.C. (eds) The Microeconomic Foundations of Macroeconomics. Other International Economic Association Publications Series. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-03236-5_3
Download citation
DOI: https://doi.org/10.1007/978-1-349-03236-5_3
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-03238-9
Online ISBN: 978-1-349-03236-5
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)