In some ways the most striking novelty in Keynesian…
![“In some ways the most striking novelty in Keynesian doctrine was that (abstracting from effects on foreign trade) an all-round reduction in wages would not reduce unemployment and (introducing Kalecki’s elaboration) would actually be likely to increase it. [p. 129]” quote by Joan Robinson](https://sms4smile.com/q/i/e9b/joan-robinson-11438_keynes_in-some-ways-the-most-striking-novelty-i_628471.png)
““In some ways the most striking novelty in Keynesian doctrine was that (abstracting from effects on foreign trade) an all-round reduction in wages would not reduce unemployment and (introducing Kalecki’s elaboration) would actually be likely to increase it. [p. 129]””
About This Quote
This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation.
Keynesian theory suggests that cutting wages does not lower unemployment and may even raise it, contrary to traditional views.
In simple terms: Lower wages might not reduce joblessness and could increase it.
Key Takeaway
Rethink wage policies as tools for employment, not just cost control.
Themes
macroeconomics
employment theory
wage policy
Mood
critical
thought‑provoking
Type
economic
theoretical
When to use this quote
- policy making
- business strategy
- labor negotiations
Key Concepts
Keynesian economics
Kalecki elaboration
labor market dynamics
Questions to Reflect On
- Why might firms resist lowering wages despite theoretical benefits?
- How do wage cuts affect long‑term economic stability?
A Different Perspective
Reducing wages could lower worker morale and productivity, offsetting benefits.