Indeed, Jim has a point: > 1. Frankly, I don't see what's wrong with positing a > downward-sloping demand curve as long as one remembers the > _ceteris paribus_ condition (holding expectations constant): > maybe it's not a falsifiable or testable proposition and > therefore it's tautological (as Robin suggests). But all of > social science (right, left, and center) has some propositions of > that sort, as part of their Lakatosian "hard core." To reject > this kind of hard core is tantamount to rejecting abstraction. The problem is that this abstraction in particular may be 'valid' only for a very small (infinitesimal) lenght of the 'curve'; sometimes (depending on the 'good' in question) it can even be nearly a 'point' (so what do we do with a curve that turns to be only a point?). As soon as a relatively significant change in price occurs, expectations will immediately change!! And these will pull the demand probably stronger than the actual price change... Then, one could also think that a 'more useful' or 'less tautological' abstraction could be to draw a demand curve against the 'expected price', while (ceteris paribus) holding the actual price constant... But again, as I said before, in certain (speculative) markets in particular, the actual price is affected by the expectations of future prices, and so on... (something to do with ergodicity?) I can agree with that it is not a question of left or right...; it is a methodological issue in its own right (though I must admit that for one reason or another I always felt that the 'left' is furnished with a sounder methodology...). In terms of right or left, if this is the question, I am quite comfortable with Jim's examples, as well as with recognizing that stocks and FEX markets behave 'differently' than NC ecomonics tells, and that not only labour, savings, stocks, but also basic needs (i.e. 'commodities') may very well follow the same 'unpredictable' pattern. Nobody (yet, if I remember) has mentioned the quite recurrent examples of people in third world countries buying more of the basic stuff which prices suddenly begin to raise... En fin, good to think about. Salud Alex Alex Izurieta E-mail: [EMAIL PROTECTED] Institute of Social Studies P.O. Box 29776 2502 LT The Hague Tel. 31-70-4260480 Fax. 31-70-4260755
