Richard Lipsey and the "Tyranny" of a Unique Labour Market Equilibrium

Journal title HISTORY OF ECONOMIC THOUGHT AND POLICY
Author/s Antonella Palumbo
Publishing Year 2024 Issue 2023/2
Language English Pages 25 P. 5-29 File size 117 KB
DOI 10.3280/SPE2023-002001
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The article discusses Richard Lipsey’s (2000a, 2000b, 2010, 2016) criticism of the uniqueness of the macroeconomic equilibrium at constant inflation postulated by new-classical macroeconomic models. Lipsey’s position is analysed in the light of his early contribution to the debate on the Phillips curve (Lipsey 1960). There, as later, Lipsey’s argument rests on the assumption that the labour market, though characterised by a unique demand-and-supply equilibrium, may persist in disequilibria in the long run. Such proposition is discussed critically. Lipsey’s analysis can be seen as a clear expression of the fundamental theoretical difficulty in reconciling Keynesian macroeconomic analysis with the neoclassical postulates.

Keywords: Richard Lipsey; Phillips curve; labour market; equilibrium and disequilibrium

Jel codes: B22, B31, E12, E24, J20

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Antonella Palumbo, Richard Lipsey and the "Tyranny" of a Unique Labour Market Equilibrium in "HISTORY OF ECONOMIC THOUGHT AND POLICY" 2/2023, pp 5-29, DOI: 10.3280/SPE2023-002001