CLOSURE RULES AND ECONOMIC THEORY : AN EXPOSITION

Date

1993

Author

Ekinci, Nazım Kadri

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This paper approaches the "closure problem", i. e. the way in which saving-investment equality is established in a macro model, from the point of view of the classical dual theory of income distribution and accumulation. It is also recognized that the economies we are investigating are monetary production economies. As such, the notion of a monetary equilibrium is of prime importance. It is argued that in the Keynesian model there is no real equilibrium concept independent of monetary equilibrium. The Walrasian model, by contrast, will be shown to be modelling a world in which money plays no essential role, in the sense that there is no concept of monetary equilibrium that can be distinguished from real equilibrium.

URI

https://hdl.handle.net/11511/110155

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Department of Economics, Article