© 2015

Keynesian Economics and Price Theory

Re-orientation of a Theory of Monetary Economy


Part of the Advances in Japanese Business and Economics book series (AJBE, volume 7)

Table of contents

  1. Front Matter
    Pages i-xv
  2. Masayuki Otaki
    Pages 1-12
  3. Keynesian Economics and Price Theory

    1. Front Matter
      Pages 13-13
    2. Masayuki Otaki
      Pages 15-41
  4. Applications to Labor Economics and Inflation Theory

    1. Front Matter
      Pages 43-43
  5. Applications to International Economics

  6. Applications to Economic Growth Theory

  7. Critiques of the Existing Monetary Theories

    1. Front Matter
      Pages 175-175
    2. Masayuki Otaki
      Pages 177-190

About this book


This book reconstructs Keynesian macroeconomics so that it is compatible with the neoclassical dynamic microeconomic theory. This theory adopts three postulates: rational expectations, perfect price flexibility, and exclusion of the money in utility function (MIU). Based on the new theoretical finding that the Lucas model (1972) contains multiple equilibria, the author unifies Keynesian and monetarist theories within the same framework. The book applies the above basic theory to international macroeconomics and economic growth theory.

New Keynesian theory contains logical inconsistencies: menu costs that have no close relationship with microeconomics and MIU, which implies that the money accumulated as wealth is never spent. These two assumptions do not proximate the real world. In this volume, the author discusses how various segregated theoretical approaches in macroeconomics relate to one another and proposes how to integrate them.


Advanced Keynesian Economics Critique on Monetarism Critique on New Keynesian Economics International Keynesian Economics Keynesian Economic Growth Theory

Authors and affiliations

  1. 1.Institute of Social SciencesThe University of TokyoBunkyo-kuJapan

Bibliographic information