Leijonhufvud — “Keynes and the Keynesians: A Suggested Interpretation”

This our weekly discussion of the price level as it relates to Perry Mehrling's money view. The price level is the average price of goods in terms of money or, equivalently, the price of money in terms of goods. But what determines the price level? Why is the price level important? And how does it fit into the money view?

For this week, we're reading a 1967 essay by Axel Leijonhufvud entitled "Keynes and the Keynesians: A Suggested Interpretation," in which he suggests that the key feature of a Keynesian world is that quantities adjust before prices.

https://www.jstor.org/stable/1821641
https://archive.org/details/informationcoord0000leij/