DISEQUILIBRIUM THEORIES AND THEIR POLICY IMPLICATIONS: TOWARDS A SYNTHETIC DISEQUILIBRIUM APPROACH.

This paper examines the FRIEDMAN-PHELPS 'expectational (dis)equilibrium' and the CLOWER-LEIJONHUFVUD 'non-market-clearing' paradigms as alternative disequilibrium theories, and draws their respective policy implications. Then, these paradigms are taken as complementary to each other, as containing necessary ingredients for a synthetic disequilibrium theory, whose policy implications can only tentatively be explored. A general disequilibrium theory is founded on the notion of 'disequilibrium consciousness' and on a detailed characterization of 'conjectural' price and/or quantity responses to non-market-clearing, whose quasi-equilibrium outcome is conditioned by both expectations and the intramarket spillover effect. [ABSTRACT FROM AUTHOR]