User:Nick Gardner /Sandbox

 

The Keynesian equation system

Let:-
    y = the thenational income
    N = numbers employed
    W = the money wage
    P = the price level
    M = the money supply
    l = the income elasticity of demand for money
    L = the interest elasticity of demand for money

then:-

The demand for money

M = lPy + L(r)   ------------------------ (1)

The consumption function

s = s(y)   -------------------------------- (2)

The production function

y = y(n)  ------------------------------------ (3)

The labour market

dy/dn = W/P  ------------------------------- (4)

Investment

i = i(r)  --------------------------------------- (5)

Savings

s = i  ------------------------------------------ (6)

Sticky wages

W =W_{o,  --------------------------------------------------- (7)}