Short period and long period in macroeconomics: an awkward distinction

Abstract

Abstract: The aim of this paper is to show that the use and meaning of the well-known concepts of short period and long period is often unclear and may be seriously misleading when applied to macroeconomic analysis. Evidence of this confusion emerges through examination of four macroeconomics textbooks and reappraisal of the interpretative debate - which took place mainly in the 1980s and 1990s - aiming at establishing whether Keynes’s General Theory should be considered as a short- or long-period analysis of the aggregate level of production. Having explored some possible explanations for the difficulties in defining and applying these methodological tools at a ‘macro’ level, the conclusion is suggested that it would be preferable to abandon this terminology in classifying different aggregate models and simply to make explicit the given factors, independent and dependent variables in each model in use, exactly as Keynes did in Chapter 18 of his major work.