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The Dubious Labor Market Analysis in Meltzer's Restatement of Keynes' Theory

Journal of Economic Literature 1983
A LLAN MELTZER has given the economics profession an interesting and alternative Monetarist prospective to Keynes' General Theory' (Meltzer, 1981). Although Professor Meltzer generously acknowledges our useful exchange on an earlier draft of his fascinating paper, there still remain many unresolved analytical disagreements regarding Keynes' theory. Some of these differences may be questions of interpretation, hence open to differing views, but there is at least one vital relationship in Meltzer's model that deserves an airing for Meltzer's version is (a) inconsistent with Keynes' model and (b) logically inconsistent within Meltzer's own restatement of Keynes' theory. The disagreement turns on the specification of the demand for labor function.