michael,
I get the message that most (if not all) are
losing interest in this, so this will be my last on
this. But.....
Not clear to me why AS/AD implies some
focus on prices as a policy variable, other than
that they are in there. Maybe there is more of a
tilt there. Keynesians were certainly criticized for
ignoring inflation, although AS/AD allowed for a
non-monetarist explanation of it.
I grant you that expectations are not in there.
But, I do not see why AS/AD as such says government
can do nothing. In a world of upward-sloping AS curves,
government can move AD out and thus raise real output
and lower unemployment. Again (and for the last time)
it is the assumption of a vertical AS that gives that last
conclusion, unless one pulls a Colander and declares the
vertical AS curve to shift out with government AD policies.
Oh well, enough of that, except to note that probably
the reason that Colander's JEP piece on this got so much
mail is that it is not just radical economists who are frustrated
but pretty much most economists with a brain in their heads.
None of the textbook presentations are fully internally
consistent and most of us know this. I have cooked up my
own version that makes sense to me, but that is what a lot
of us have been having to do while hoping the students don't
get too confused by our diverging from whatever text we have
made them buy.
Barkley Rosser
http://cob.jmu.edu/rosserjb
-----Original Message-----
From: [EMAIL PROTECTED] <[EMAIL PROTECTED]>
To: [EMAIL PROTECTED] <[EMAIL PROTECTED]>
Date: Thursday, August 31, 2000 6:10 PM
Subject: [PEN-L:1077] Re: AD?
>It is anti-keynesian in the sense that it suggests that appropriate prices
>can guide an economy. It is anti-k. because it ignores the role of
>expectations. It is anti-k. because it is used to suggest that
>intervention in the economy cannot do much good.
> >
>> michael,
>> OK, I grant that on pp. 300-303 of the GT, Keynes
>> does not describe an AD curve in P-Q space, although
>> he clearly describes an AS, curve, without calling it that.
>> So, perhaps a downward-sloping AD curve in P-Q
>> space is "non-Keynesian" in that sense. But, why is it
>> "anti-Keynesian"? After all, a downward-sloping AD
>> curve allows for cost-push inflation theories, although
>> one can get that with a vertical or upward-sloping AD
>> if one has it shift backwards due to falling income with
>> a backward-shifting AS curve.
>> Barkley Rosser
>>
>>
>
>
>--
>Michael Perelman
>Economics Department
>California State University
>Chico, CA 95929
>
>Tel. 530-898-5321
>E-Mail [EMAIL PROTECTED]
>
>
