Franco Modigliani and oligopoly

Paolo Sylos Labini

Abstract


Modigliani became interested in Keynes's General Theory even before knowing anything about economics. After becoming a professional economist, through his research both theoretical and applied, his teaching, his policy recommendations to fight mass unemployment, Modigliani became worldwide known as one of the great Keynesian economists. Yet, there are many building blocks of Keynes's General Theory that in Modigliani's work cannot be found. In this lecture, it is shown that his pursuit of the task of "digesting"--as he put it--Keynesian innovative ideas into the theoretical framework of Walrasian economics entails the loss of Keynes's genuine revolutionary ideas. The author argues--with some personal recollections--that Keynes's conviction of the necessity of a radically novel "monetary theory of production" remains as relevant today as it was when originally proposed. More than attempting to "digest" the Keynesian revolution, we should attempt to make it fully accomplished.

 

 JEL Codes: B21, B22, B31, D43, E00

 


Keywords


Oligopoly

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References


MODIGLIANI, F. (1944), "Liquidity preference and the theory of interest and money", The Collected Papers of Franco Modigliani, MIT Press, Cambridge, Mass., I vol., pp. 23-68.

MODIGLIANI, F. (1949), "Fluctuations in the saving-income ratio. A problem of economic forecasting", The Collected Papers of Franco Modigliani, MIT Press, Cambridge, Mass., II vol., pp. 3-40.

MODIGLIANI, F. (1958), "New developments on the oligopoly front", The Collected Papers of Franco Modigliani, MIT Press, Cambridge, Mass., I vol., pp. 400-18.

MODIGLIANI, F. (1960), "The "permanent income" and the "life cycle" hypothesis of saving behavior: comparison and tests", in collaboration with A. Ando, The Collected Papers of Franco Modigliani, MIT Press, Cambridge, Mass., II vol., pp. 229-74.

MODIGLIANI, F. (1973), "A generalisation of the Phillips Curve for a developing country", in collaboration with Ezio Tarantelli, The Collected Papers of Franco Modigliani, MIT Press, Cambridge, Mass., I vol., pp. 379- 99.

MODIGLIANI, F. (1974), "On the role of expectation of price and technological change in an investment function", in collaboration with A.K. Ando, R. Rasche and S.J. Turnowsky, The Collected Papers of Franco Modigliani, MIT Press, Cambridge, Mass., I vol., pp. 345-78.

MODIGLIANI F. et al. (1998), "An economists' Manifesto on unemployment in the European Union", Banca Nazionale del Lavoro Quarterly Review, no. 206, September, pp. 327-61.


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Reg. Tribunale di Roma n.377/2009 del 19/11/2009