Tuesday, August 12, 2014

Lord Keynes — Davidson on Nominal Contracts and Uncertainty


Short and sweet explanation of why capital not only produces wage and price rigidity but also requires it operationally.

No, it's not the unions, or inflexible workers unwilling to accept flexible wages.

Rather, it's an attempt to introduce a modicum of predictability in a non-ergodic system through forward contracts.

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Davidson on Nominal Contracts and Uncertainty
Lord Keynes

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