ABSTRACT
This chapter begins with investigations of the short-run steady-state properties of some models which incorporate some or all of those elements. It offers some brief remarks on the implications of the Kaleckian approach for the role of the State in macro-economics. The assumption made by Michal Kalecki was that firms typically operate with excess capacity with the consequence that unit costs are constant with respect to output changes, so that in real income correspond to changes in money incomes, with prices unaffected. The M. Friedman and A. J. Schwartz approach views fluctuations in nominal income arising from fluctuations in money supply, and hence to remove the former it is merely necessary to remove the latter. A deflationary policy introduced through control of money supply may tend to injure firms in the short term. Control of the money supply leads to control over bank lending, and thereby hits those who make use of bank lending, i.e. firms rather than households.
