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Capacity Utilization, Inflation, and Monetary Policy: The Duménil and Lévy Macro Model and the New Keynesian Consensus

  • Marc Lavoie
  • Peter Kriesler
Chapter

Abstract

The article considers the adjustment toward long-run equilibrium within the Duménil and Lévy macro model, with modifications. Findings show that long-run convergence to fully adjusted positions with normal utilization is not achieved when a more realistic reaction function is proposed. Classical equilibrium occurs when a vertical Phillips curve is substituted, but the model is isomorphic to the “new consensus” model and to features of “new” endogenous growth theory.

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Copyright information

© Joseph Halevi, G. C. Harcourt, Peter Kriesler and J. W. Nevile 2016

Authors and Affiliations

  • Marc Lavoie
  • Peter Kriesler

There are no affiliations available

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