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.

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• Item metadata

  Item type:	Monograph(Discussion paper)
  ID code:	67730
  Dates:	Date Event 14 June 2004 Published
  Notes:	Published as a paper within the Discussion Papers in Economics, No. 04-07 (2004)
  Subjects:	Social Sciences > Economic Theory
  Department:	Strathclyde Business School > Economics
  Depositing user:	Pure Administrator
  Date deposited:	07 May 2019 15:28
  Last modified:	18 Nov 2024 01:22
  URI:	https://strathprints.strath.ac.uk/id/eprint/67730