The wage–employment relationship in Modigliani's 1944 article. Issue 1 (2nd January 2017)

• Record Type: Journal Article
• Authors: Rancan, Antonella
• Is Part Of: European journal of the history of economic thought. Volume 24:Issue 1(2017)
• Page Start: 143
• Page End: 174
• Publication Date: 2017-01-02
• Subjects: Modigliani -- wage rigidity -- Patinkin -- Keynesian unemployment -- neoclassical synthesis; B22 -- B31; Economic history -- Periodicals; 330.94
• DOI: 10.1080/09672567.2016.1164210
• Languages: English
• ISSNs: 0967-2567

Abstract

Abstract: Modigliani's 1944 "Econometrica" article is considered one of the most important efforts to reconcile Keynes with classical economic thinking through the wage rigidity hypothesis. The paper reconstructs the genesis of Modigliani's article and compares Modigliani's and Patinkin's interpretation of the wage–employment relationship. It also discusses Modigliani's contribution to the neoclassical synthesis, arguing that Modigliani's attention to the monetary origin of and solution to unemployment contrasts with the neoclassical synthesis neglecting of the monetary side of the system and its inclination towards fiscal policy.