Peter,
I see no reason why pass-through analysis
cannot be incorporated into AS/AD.
JBR
-----Original Message-----
From: Peter Dorman <[EMAIL PROTECTED]>
To: [EMAIL PROTECTED] <[EMAIL PROTECTED]>
Date: Monday, August 28, 2000 6:17 PM
Subject: [PEN-L:905] Re: Re: Re: Re: intro macro text
>Just to show how antidiluvian I am, when I last taught macro in the early
90s I
>used pass-through analysis. I reasoned out with the students the factors
that
>would increase the ability of firms to pass costs through to prices and
workers
>to pass prices through to wages. Then the ceteris paribus relationship
between
>real aggregate demand (in the Keynesian sense) and the rate of inflation
>follows. By the way, I would let students guide me in their analysis each
time
>I did this, and the exact list of factors would change slightly from class
to
>class (although it always included unemployment and capacity utilization).
I
>never worried about it. The goal, after all, is to help students acquire
the
>ability to reason their way through macro after they've forgotten
everything
>they tried to memorize for their exams.
>
>Peter
>
>"J. Barkley Rosser, Jr." wrote:
>
>> Peter,
>> You can SAY it. But being able to show
>> it on a blackboard or an overhead or a
>> power point, or whatever, in a graph, gives
>> it some analytical and visual impact. Does
>> a freshman with no econ know why
>> "overheating an economy with bottlenecks"
>> will cause inflation without more of a model
>> to hang these remarks on?
>> Barkley Rosser
>
>
