Information Failures and Wandering Systems in Keynesian Economics. Clower-Leijonhufvud Revisited

A reexamination of the Clower-Leijonhufvud approach to Keynesian theory is presented. Central elements are the lack of information available to atomistic economic agents in a decentralized environment, and the insistence on multi-period analysis. Such a reexamination is necessary to avoid the currently widespread identification of Keynesian macroeconomics with models of exogenous prices or of non-atomistic agents. The analysis denies the frequent association between Clower and Leijonhufvud and the fix-price method. It also makes a contribution to the debate between "atomistic" and "nonatomistic" approaches to Keynesian issues.