ABSTRACT
As explained in previous chapters, the effect of the synthesis of pre-Keynesian and Keynesian economics was to exclude the possibility of involuntary unemployment. This was achieved by (1) the introduction of a pre-Keynesian labor market, an aggregate single commodity production function; (2) rejecting Keynes’ view that expectations were inherently volatile; (3) the inclusion of a wealth effect; and (4) presupposing general equilibrium with Walrasian market clearing. From its beginning, the synthesis version of macroeconomics left many neoclassical theorists discontent.
