Price Flexibility and Full Employment : Losing the Plot?

Grieve, Roy (2004) Price Flexibility and Full Employment : Losing the Plot? Discussion paper. University of Strathclyde, Glasgow.

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    Abstract

    This paper, from a historical perspective, questions the thesis (again in fashion) that price flexibility ensures full employment. The point is made that explanation of unemployment in terms of wage/price stickiness typified pre-Keynesian accounts, but not Keynes’s theory of involuntary unemployment. Under uncertainty, no set of prices consistent with full employment may actually exist: if so, price flexibility is not the critical factor. Finally, with respect to current use of the “AD/AS model”, we note that the strong arguments against attribution of necessarily beneficient effects to price and wage flexibility, which ought to be well-known, seem now to be forgotten.

    • Item type:Monograph(Discussion paper)
      ID code:67730
      Dates:
      Date
      Event
      2004
      Published
      Notes:Published as a paper within the Discussion Papers in Economics, No. 04-07 (2004)
      Keywords:price flexibility, full employment, economics, Economic Theory, Economics, Econometrics and Finance(all)
      Subjects:Social Sciences > Economic Theory
      Department:Strathclyde Business School > Economics
      Depositing user: Pure Administrator
      Date deposited:07 May 2019 15:28
      Last modified:21 Jun 2021 01:05
      URI:https://strathprints.strath.ac.uk/id/eprint/67730
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