General Keynesian Macroeconomics: An Analysis Based on Hoarding
International Journal of Research and Analytical Reviews 6 (2), 875-883, 2019
Posted: 12 May 2020
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General Keynesian Macroeconomics: An Analysis Based on Hoarding
Date Written: June 2019
Abstract
Macroeconomics deals with the household and the firm through the automatic mechanism of aggregate demand and aggregate supply until and unless demand deadlock or supply side rigidities affect. In these cases of demand deadlocks and supply side rigidities, intervention seems to be a general solution. However, that does not mean that it is a complete failure of the automatic mechanism., because, even in these demand deadlock and supply side rigidity situations, the automatic mechanism may revive through the asset market operations. Hoarding plays a pivotal role in determining the direction of expansion of aggregate demand.
Keywords: Hoarding, Full-employment, Keynes Effect, Pigou Effect, Liquidity Trap
JEL Classification: E0
Suggested Citation: Suggested Citation