"Keynes did not challenge the efficacy of price adjustment mechanisms in clearing particular markets in the Marshallian partial equilibrium theory on which he had been reared. He did challenge the mindless application of those mechanisms to economy-wide markets. Founding what came to be known as macroeconomics, he was modeling a whole economy as a closed system. He knew he could not use the Marshallian assumption that the clearing of one market could be safely described on the assumption that the rest of the economy was unaffected."
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Historians from EnglandPhilosophers from EnglandUniversity of Cambridge facultyEconomists from EnglandSociologists from England
Original Language: English
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Sources
James Tobin, "Price flexibility and output stability: An old Keynesian view", Journal of Economic Perspectives (1993)
https://en.wikiquote.org/wiki/John_Maynard_Keynes
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John Maynard Keynes
1883 – 1946
Britischer Nationalökonom
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