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Elgar, Edward Publishing, Inc.
General Equilibrium, Capital and Macroeconomics

General Equilibrium, Capital and Macroeconomics

by Fabio Petri


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Product Details

ISBN-13: 9781843768296
Publisher: Elgar, Edward Publishing, Inc.
Publication date: 01/01/2004
Series: New Directions in Modern Economics Series
Pages: 392
Product dimensions: 6.30(w) x 9.30(h) x 1.10(d)

Table of Contents

List of Figuresviii
1The long-period method1
1.1Introduction: On some cracks in the neoclassical edifice1
1.2Change in theory without change in method6
1.3Capital as a homogeneous factor and its roles27
1.4Neo-Walrasian equilibria33
1.5Long-period does not mean long-run35
2The problematic relationship between neo-Walrasian equilibrium analyses and real economies39
2.1The impermanence problem, the substitutability problem, the indefiniteness problem39
2.2The importance of persistent tendencies48
Appendix 2A1Was Keynes's equilibrium a temporary equilibrium?54
Appendix 2A2Franklin Fisher and disequilibrium67
3Long-period equilibria72
3.1The long-period equilibrium without a rate of interest, in economies with production but without capital72
3.2The rate of interest in economies without capital79
3.3The introduction of capital goods82
3.4The problem with the value measurement of the endowment of capital94
Appendix 3AWicksell and the average period of production99
4Must long-period equilibria be stationary? With initial observations on investment118
4.1Secular stationariness versus static stationariness118
4.2Long-period positions without constant relative prices, and non-stationary long-period equilibria with constant relative prices123
4.3Investment and demand for capital126
5Walras, the shift to neo-Walrasian equilibria, and some confusions136
5.2Walras' inconsistency138
5.3The shift to very-short-period equilibria: Hayek, Lindahl, Hicks150
5.4The co-existence of the two approaches to capital156
Appendix 5A1A reinterpretation of the Patinkin or 'Classical Dichotomy' controversy in monetary theory166
Appendix 5A2If everybody is a price-taker, who sets prices? On Arrow's conception of equilibrium187
Appendix 5A3Why the auctioneer must be a central planner and temporary equilibria may be indeterminate; or, neo-Walrasian difficulties with constant returns to scale190
Appendix 5A4Bliss on Solow's one-sector growth model203
6Reswitching and reverse capital deepening206
6.1The value of capital depends on distribution even when nothing changes physically206
6.2The inversion in the movement of relative prices, and reswitching210
6.3The relevance of reswitching221
6.4Why so many and so persistent misunderstandings?227
Appendix 6A1Reswitching and the average period of production239
Appendix 6A2Stiglitz on the Cambridge controversies241
Appendix 6A3The non-substitution theorem246
Appendix 6A4On some attempts to minimize the relevance of reverse capital deepending252
7Capital theory and macroeconomics. I: the theory of aggregate investment256
7.1Introduction: empirical evidence and theoretical difficulties256
7.2The 'array-of-opportunities' approach, and the dependence of yields on the rate of interest262
7.3The increasing-risk approach268
7.4The speed-of-adjustment problem, and Lerner270
7.5Adjustment costs277
7.6Tobin's q281
7.7Investment in general equilibrium neo-Walrasian models and conclusions284
Appendix 7A1Jorgenson and Precious287
Appendix 7A2The Pigou or real balance effect291
8Capital theory and macroeconomics. II: the labour demand curve295
8.1The labour demand curve: neo-Walrasian or long-period?295
8.2Short-period analyses of Keynesian type298
9Summary of the critical argument, and sketch of an alternative approach305
9.1Summary of the argument so far305
9.2Toward an alternative approach309
Appendix 9AWhat is wrong with using aggregate production functions324

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