Keynes' main concern in the General Theory is about the capacity of an economy to return to a full employment equilibrium when subject to a (negative) demand shock. He maintains that money wages cuts may not help reabsorb unemployment, as they do not necessarily imply a fall in real wages. On...

Keynes' main concern in the General Theory is about the capacity of an economy to return to a full employment equilibrium when subject to a (negative) demand shock. He maintains that money wages cuts may not help reabsorb unemployment, as they do not necessarily imply a fall in real wages. On...

This paper extends the out-of-equilibrium literature to analyse a structural transition characterized by the emergence of a new sector that satisfies a want lower in the hierarchical scale. In particular, the dynamic interaction demand-supply can be a source of multiple long-run outcomes if both...

This paper constructs a disequilibrium model in order to analyse the structural transition characterized by the emergence of a new sector. We show that, in an economy where preferences and technology adapt over time, multiple long-term outcomes are mainly brought about by different distributive...