Post Keynesian Economics: Debt, Distribution and the Macroeconomy - Hardcover

Palley, Thomas I.

Hardcover

ISBN 10: 031216064X ISBN 13: 9780312160647

Publisher: Palgrave Macmillan, 1996

Synopsis

This book provides a novel statement of Post Keynesian macroeconomic theory that synthesizes three strains of such theory associated with Yale (Tobin) Keynesianism, Cambridge, UK (Kaldor) Keynesianism, and American (Davidson, Minsky) Post Keynesianism. The book focuses on the significance of privately created inside debt and income distribution for the determination of economic activity. The existence of inside debt means that "nominal" wage reductions cause redistributions of wealth that can reduce aggregate demand, while the effect of income distribution on aggregate demand means that "real" wage reductions also reduce aggregate demand. Consequently, neither nominal wage flexibility nor real wage flexibility can ensure full employment in a monetary economy. The book then explores how money and inside debt are created by the normal workings of the financial system. Fluctuations in the level of debt service burdens give rise to fluctuations in aggregate demand which can then cause business cycles.

About this title

About the Author

Thomas I. Palley is Assistant Professor of Economics at the New School for Social Research, New York.

Edition details

• Publisher: Palgrave Macmillan
• Publication date: 1996
• Language: English
• ISBN 10: 031216064X
• ISBN 13: 9780312160647
• Binding: Hardcover
• Number of pages: 239