## Foundations of Post-Keynesian Economic AnalysisThis innovative book demonstrates that it is possible to construct a coherent alternative to neoclassical economics based on the contributions of post Keynesian and Kaleckian economists. It identifies elements from the non-orthodox traditions, in particular from the neo-Ricardian school, that can be welded into a convincing alternative theoretical framework. The building blocks of this synthesis are the non-neo-classical microeconomic foundations of the theory of choice and of the firm. By emphasizing the consequences of a world characterized by true uncertainty and oligopolistic dominance, Marc Lavoie extends short-period paradoxes to the analysis of the long period, and bases these macroeconomic results on microeconomic foundations. |

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Page 73

The basic answer is that individuals move upwards in the hierarchy according to

have different scales, and it is likely that widely different income levels are ...

The basic answer is that individuals move upwards in the hierarchy according to

**income effects**. Of course, as has already been pointed out, different individualshave different scales, and it is likely that widely different income levels are ...

Page 85

In our example, the price change induces no change in the choice of all

consumers whose threshold relative to

purchasing good xj. There are no substitution

In our example, the price change induces no change in the choice of all

consumers whose threshold relative to

**income**is zı”. They would all keeppurchasing good xj. There are no substitution

**effects**here. Suppose now that real**income**...Page 88

One may thus conclude that when changes in relative prices are small, the

substitution effects that they induce can be ... influence on changes in

consumption, the importance of the study of

reasserted.

One may thus conclude that when changes in relative prices are small, the

substitution effects that they induce can be ... influence on changes in

consumption, the importance of the study of

**income effects**in macroeconomics isreasserted.

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### Contents

Theory of Choice | 42 |

Theory of the Firm | 94 |

Credit and Money | 149 |

Copyright | |

4 other sections not shown

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### Common terms and phrases

actual rate aggregate demand analysis assumed base money behaviour borrow capacity utilization capital central bank changes Chapter commercial banks consumers consumption cost-plus pricing deposits economists effective demand effective demand curve Eichner endogenous equal equation equilibrium exogenous Figure firms full capacity given higher rate households impact income income effects increase induce interest rates investment function Kaldor Kalecki Kaleckian model Keynes Keynesian liquidity preference loans long run macroeconomic margin of profit marginal costs model of growth needs neo-Ricardians neoclassical economics neoclassical theory normal rate overhead labour paradox of thrift parameters positive post-classical post-Keynesian economics procedural rationality profits cost curve propensity to save rate of accumulation rate of capacity rate of growth rate of interest rate of profit rate of return rate of utilization ratio real wage rate reserves result Robinson sector share of profits standard rate target-return pricing technical progress tion uncertainty utilization of capacity workers