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An Important Inconsistency at the Heart of the Standard Macroeconomic Model

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Abstract

The standard neoclassical model is the foundation of most mainstream macroeconomics. Its basic structure dominates the analysis of macroeconomic phenomena, the teaching of the subject and even the formation of economic policy. And, of course, the modern quantity theory of money and its attendant monetarist prescriptions are grounded in the model’s strict separation between real and nominal variables.

Keywords

  • Interest Rate
  • Price Level
  • Capital Stock
  • Real Wage
  • Money Supply

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  • DOI: 10.1057/9780230353848_4
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References

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© 2012 Wynne Godley

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Godley, W., Shaikh, A. (2012). An Important Inconsistency at the Heart of the Standard Macroeconomic Model. In: Lavoie, M., Zezza, G. (eds) The Stock-Flow Consistent Approach. Palgrave Macmillan, London. https://doi.org/10.1057/9780230353848_4

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