A Disequilibrium-Equilibrium Model with Money and Bonds

1 In an artic1e in the Review of Economic Studies, G1ustoff attempts to prove the existence of a Keynesian "equilibrium". The significance of his article tran scends its explicit purpose of proving existence, since it deals with the more fun damental question of what is the nature of a Keynesian equilibrium with involuntary unemp1pymant: Moreover, it approaches the problem frPlIl an unorthodox point of view. 4 G1ustoff follows the direction of C1ower,3 who in turn goes back to Morishima and Patinkin;5 that is, unlike the theory based on ex ante demand or supply functions, he redefines the labour supply function using a "dual-decision hypothesis". The root of this problem can be traced back to the classical discussion of ex ante and ex post by Oh1in,6 the representative of the Stockholm school., Therefore one can say that G1ustoff refines this line of discussion by utilizing a recent de velopment in economics. One can also say that his approach is basically the same as that of Leijonhufvud who advocates the "Economics of Keynes" and not the "Keynesian Economics". To explain G1ustoff's discussion, let us begin with the following figures for convenience. [4 ]. 1- See 2. See [13] . 3. See [2 ]. 4. See [15]. pp. 24-26." [21] and [22] (ch. 13 and ch. 14).

Inhalt
I. Introduction.- II. Households and Firms.- 1. The Household.- 2. The Firm.- III. The General Equilibrium System Under The DualDecision Hypothesis Disequilibrium-Equilibrium Model.- 1. The Standard General Market Equilibrium and the General Market Equilibrium under the Dual-Decision Hypothesis.- 2. Assumptions of the Model.- IV. The Existence Proof.- 1. The Household's and Firm's Budget Constraints and Money Constraints Rewritten for Convenience.- 2. Construction of Individual Demand or Supply Functions.- 3. The Existence Proof (1) The Model with Modified Functions based on the Dual-Decision Hypothesis .- 4. The Existence Proof (2) The Original Model (Non-Modified Functions) based on the Dual-Decision Hypothesis .- V. Conclusions.- Appendix I.- Appendix II..- Appendix III.- Appendix IV.- References.