On the Classical and Marshallian Foundations of Keynesian and Post-Keynesian Economics

Abstract

In this chapter I want to reconsider the microeconomic foundations of Keynes’s theory of effective demand as described in Chapter 3 of The General Theory. Athanasios Asimakopulos has dedicated an important article to this subject, focusing on the Marshallian construction of the supply curve and on procedures of aggregation.¹ I want to adopt a wider perspective in order to allow a comparison by means of a simple model between rival proposals for the microeconomic foundation of macroeconomics.

First published in the proceedings of the conference Employment, Distribution and Markets (dedicated to the Memory and Work of A.H. Asimakopulos); reprinted in G. Harcourt et al., Income and Employment in Theory and Practice (London: Macmillan, 1995), pp. 126–53.