Abstract

This paper discusses the determination of wages and employment under a
Keynesian perspective, stressing mainly the microeconomic aspects of the effective demand.
The adopted approach follows the “Weintraub tradition”. It is argued that the level of
employment depends only upon the effective demand assuming that relative prices are
rigid. However, the real wage is a function also of the level of employment and the relation
between nominal wages and the user cost.

JEL Classification: E12; E24.