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The Keynesian nexus between the market for goods and the labour market

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  • Marco Guerrazzi

    (University of Genoa)

Abstract

In this paper, I build on the Keynesian analysis of the market for goods to draw some implications on the dynamic behaviour of some typical labour market indicators. Specifically, focusing on real magnitudes and distinguishing between the aggregate expected demand function and the aggregate expenditure function, I discuss the implied “daily” adjustments of expected and actual real wages that allow to achieve a short-run equilibrium. In addition, in order to show that the suggested picture of market for goods does not require a distinct setting to describe the transactions of labour services, I offer a rationale for equilibrium unemployment due to deficient demand grounded on the searching-and-matching theory.

Suggested Citation

  • Marco Guerrazzi, 2023. "The Keynesian nexus between the market for goods and the labour market," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 70(2), pages 195-216, June.
    • Handle: RePEc:spr:inrvec:v:70:y:2023:i:2:d:10.1007_s12232-023-00415-w
    DOI: 10.1007/s12232-023-00415-w
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    Cited by:

    1. Marco Guerrazzi, 2023. "Optimal growth with labor market frictions," International Journal of Economic Theory, The International Society for Economic Theory, vol. 19(4), pages 961-987, December.

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    More about this item

    Keywords

    Keynesian economics; Expected demand; Expenditure function; Aggregate supply;
    All these keywords.

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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