Imperfect competition and the trade cycle: aborted guidelines from the late 1930s

Rodolphe dos Santos Ferreira, Claude D'Aspremont*, Louis André Gérard-Varet

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

8 Citations (Scopus)

Abstract

The cyclical behavior of wages and prices was a central topic in trade cycle analysis on the eve of the Second World War. Keynes and Harrod independently referred in the same year to the supposed countercyclicality of real wages, a feature that was contested soon after, on empirical grounds, by Dunlop and Tarshis. An ambitious research program integrating macroeconomics and imperfect competition was elaborated to reconcile theory and observations, but was suddenly discontinued. This program was sufficiently ripe to include the main ingredients of the New Keynesian research program, which was only put forth in the 1980s.
Original languageEnglish
Pages (from-to)513-536
Number of pages24
JournalHistory of Political Economy
Volume43
Issue number3
DOIs
Publication statusPublished - Jul 2011
Externally publishedYes

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