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DISEQUILIBRIUM THEORIES AND THEIR POLICY IMPLICATIONS: TOWARDS A SYNTHETIC DISEQUILIBRIUM APPROACH
Author(s) -
Korliras Panayotis G.
Publication year - 1980
Publication title -
kyklos
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.766
H-Index - 58
eISSN - 1467-6435
pISSN - 0023-5962
DOI - 10.1111/j.1467-6435.1980.tb02643.x
Subject(s) - disequilibrium , economics , market clearing , clearing , spillover effect , mathematical economics , neoclassical economics , keynesian economics , microeconomics , finance , medicine , ophthalmology
SUMMARY This paper examines the F riedman ‐P helps ‘expectational (dis)equilibrium’ and the C lower ‐L eijonhufvud ‘non‐market‐clearing’ paradigms as alternative disequilibrium theories, and draws their respective policy implications. Then, these paradigms are taken as complementary to each other, as containing necessary ingredients for a synthetic disequilibrium theory, whose policy implications can only tentatively be explored. A general disequilibrium theory is founded on the notion of ‘disequilibrium consciousness’ and on a detailed characterization of ‘conjectural’ price and/or quantity responses to non‐market‐clearing, whose quasi‐equilibrium outcome is conditioned by both expectations and the intra‐market spillover effect.