I apologize for giving such a flip answer to Doug's
question. Showed my own frustration. But, I would
like to follow up a bit more.
Peter is probably right that the major focus on
AS/AD does involve teaching econ and especially at
the introductory level. For better or worse it has
become the overwhelmingly predominant approach at
that level for reasons that Michael and others have laid
out. Mostly it is a half-baked hodge-podge, atlhough I
have already said that I think it is possible to present it
in a way that is neither too unrealistic nor too internally
inconsistent, if not totally avoiding those flaws. But, I
certainly respect someone like Peter D. who attempts
to present a more coherent and realistic view. As has
already been noted, he and anyone like him faces this
very serious problem regarding the availability of suitable
textbooks.
Where did the AD/AS approach come from? It became
influential in the 1970s during the oil price shock era because
it made it easier to present the idea of a supply-side inflation.
Prior to then the predominant approach was the purely demand
side Keynesian cross model, which still persists to some degree
in various texts. The trend has been to replace the latter with
the former, although I noted that it is possible to link them consistently.
Let me mention one more aspect of this that may extend
beyond just the confines of the principles of econ class. If you
were following at all closely you may noticed me making a big
deal about whether books were using a vertical AS curve or not.
This assumption, increasingly widespread in the texts, does have
a very strong ideological content. It is usually derived from the
idea that there is a natural rate of unemployment, and that the
economy is naturally self-stabilizing at that rate of unemployment,
associated with the level of real output over which the vertical
AS curve is located. This implies that the market capitalist
economy works fine if it is laissez-faire. This is also tied to the
push to emphasize long-run growth and say (in contrast to Keynes)
that the short run does not matter. In a world with no recent recessions
this is becoming a very popular approach, although this is usually
derived from an aggregate neoclassical production function that is
itself a standing pile of crap.
Even though I respect Peter D.'s efforts, I think it is possible
to present a reasonably internally consistent AS/AD model that
can tell a lot of interesting stories about the actual economy.
The details, however, are very important. And, increasingly the
texts are not only using only AS/AD, but insisting that it be of this
incredibly simpleminded version that is also jammed into a
very ideological framework is very frustrating for those of us
attempting to teach these courses.
I also remind that in many institutions, principles is viewed
as a garbage dump, a place to use grad students, adjuncts,
or just anybody dragged off the street who can drool to teach.
Big Cheese economists teach one grad seminar a semester
on their research. But a lot of us on this list for well known
reasons labor in the intro vineyards/salt mines, although personally
I enjoy it, despite the frustrations.
Let me close by quoting a cartoon I saw about a decade ago.
A badly dressed and unshaven guy is sitting on a bench talking to
a man in a suit. The badly dressed guy says, "First I was a
Keynesian, then I was a monetarist, then I was a supply sider. Now
I'm just a bum."
Barkley Rosser
