1. Keynes Seminar 18 February 2009 Mark Hayes Robinson College, Cambridge General Theory Reading Group 7: (Book V) Why wage-cuts will not create jobs www.postkeynesian.net © PKSG 2009

2. The employment function N* = F ( D w * ) Not simply Z w in disguise The macrofoundation of microeconomics Perfect competition a requirement

3. Keynes on the theory of value “If we suppose the volume of output to be given, i.e. to be determined by forces outside the classical scheme of thought, then there is no objection to be raised against the classical analysis of the manner in which private self-interest will determine what in particular is produced, in what proportions the factors of production will be combined to produce it, and how the value of the final product will be distributed between them.” (GT pp. 378-379)

4. The employment function N* = F ( D* ) Not simply Z w in disguise The macrofoundation of microeconomics Perfect competition a requirement

5. Structure of Book V Chapter 19: the influence of money-wages on employment Chapter 20: the influence of employment on money-wages Chapter 21: the influence of the quantity of money on employment, money-wages and the price-level

6. Keynes’s Generalisation of the Quantity Theory

7. Next time: Brendan Sheehan Leeds Metropolitan University The General Theory and Policies for Global Prosperity 25 February 2009