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The Keynesian Revolution in the Making, 1924–1936$
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Peter Clarke

Print publication date: 1990

Print ISBN-13: 9780198202196

Published to Oxford Scholarship Online: October 2011

DOI: 10.1093/acprof:oso/9780198202196.001.0001

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PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 23 July 2021

Rigid prices and flexible doctrines, I: Public works

Rigid prices and flexible doctrines, I: Public works

(p.162) 8 Rigid prices and flexible doctrines, I: Public works
The Keynesian Revolution in the Making, 1924–1936

Peter Clarke

Oxford University Press

Few other economists had much trouble in translating the propositions of the Treatise into their own preferred language, for the good reason that they shared the same fundamental neoclassical postulates. Though the Treatise seemed novel in defining saving and investment so that they need not be equal, it still postulated a tendency for the interest rate to bring them into equilibrium. Keynes attributed the disequilibrium obtained in Britain to the fact that interest rates were insufficiently flexible; but he could not deny that flexibility of real wages was also intrinsic to the process. Most economists told a similar story — in their own words, of course. Many economists joined Keynes in seeking gadgets or devices to tackle unemployment, given that prices exhibited an unwanted rigidity — while not overlooking the relevance of wage cuts, if only they were practicable.

Keywords:   public works, unemployment, Treatise, Keynes, prices, interest rates

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