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Capacity Utilization, Inflation, and Monetary Policy: The Duménil and Lévy Macro Model and the New Keynesian Consensus

Department of Economics, University of Ottawa, Canada, marc.lavoie{at}uottawa.ca

Peter Kriesler

University of New South Wales, p.kriesler{at}unsw.edu.au

The article considers the adjustment toward long-run equilibrium within the Duménil and Lévy macro model, with modifications. Findings show that long-run convergence to fully adjusted positions with normal utilization is not achieved when a more realistic reaction function is proposed. Classical equilibrium occurs when a vertical Phillips curve is substituted, but the model is isomorphic to the "new consensus" model and to features of "new" endogenous growth theory.

JEL classification: E12, E40, E52, E58

Key Words: monetary policy • central bank • inflation • capacity utilization • new Keynesian • Marxism

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Review of Radical Political Economics, Vol. 39, No. 4, 586-598 (2007)
DOI: 10.1177/0486613407306824


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This Article Abstract Free Full Text (Free PDF) Free Alert me when this article is cited Alert me if a correction is posted Citation Map Services Email this article to a friend Similar articles in this journal Alert me to new issues of the journal Add to Saved Citations Download to citation manager Request Permissions Request Reprints Add to My Marked Citations Citing Articles Citing Articles via Google Scholar Citing Articles via Scopus Google Scholar Articles by Lavoie, M. Articles by Kriesler, P. Search for Related Content Social Bookmarking                         What's this?