The Short Period and the Long Period in Macroeconomics: An Awkward Distinction

The aim of this paper is to show that the 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 reappraisal of the interpretative debate of the 1980s and 1990s, which aimed to establish whether Keynes's General Theory should be considered a short- or long-period analysis of the aggregate level of production. Further evidence is provided by the ambiguous use that seems to be made of this distinction in macroeconomics textbooks, as will be shown in the paper. Having explored some possible explanations for the difficulties in defining and applying these methodological tools at a ‘macro’ level, the conclusion is drawn that it would be preferable to abandon this terminology in classifying different aggregate models and simply to make explicit the given factors and the independent and dependent variables in each model, exactly as Keynes did in Chapter 18 of his major work.