Re: Re: AS/AD

["J. Barkley Rosser, Jr." <rosserjb@xxxxxxx>]

Jim,
     But usually this Say's Law argument is dragged
in for the long run analysis.  But, the new wave led
by the execrable Mankiw (with even Colander now
tagging along, bah) is to place this huge emphasis
on long run growth.  I imagine that Brad D. approves
of this, given his ten billion year perspective on econ
growth (and I'm not out to pick a fight with him on this),
but I see this as what has led to all kinds of problems
in the current texts.
Barkley
-----Original Message-----
From: Jim Devine <jdevine@xxxxxxxxxxxxxxx>
To: pen-l@xxxxxxxxxxxxxxxxxxx <pen-l@xxxxxxxxxxxxxxxxxxx>
Date: Tuesday, August 29, 2000 3:45 PM
>Subject: [PEN-L:941] Re: AS/AD


>Barkley wrote:
>>... 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.
>
>My impression (which is not based on a statistical sample, BTW) is that
>fewer & fewer textbooks have a vertical AS curve, except in the long run.
>New classical economics and supply-side economics are not very popular
>these days (except in attenuated forms) while most textbook-writers want to
>sell books and so want to tell (new) Keynesian stories about business
>cycles (with an upward-sloping short-run AS curve).
>
>The key classical assumption that pervades economics (and, seemingly, Al
>Gore's mind) is not the assumption of continuous full employment but rather
>the version of Say's Law that says that increased saving (nowadays in the
>form of an increased government budget surplus) leads to increased
>investment. Of course, this whole issue is hidden behind the scenes in the
>AS/AD diagram. To talk about it using a diagram, the "Keynesian cross" is
>needed (or IS-LM or something better ...). This is a crucial critique of
>AS/AD: it distracts us from the saving/investment nexus. That doesn't mean
>that we shouldn't talk about AS/AD, but it does tell us that it's woefully
>inadequate understanding the issues that divide economists.
>
>>... 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.
>
>There's a contradiction here: if we underlings are left to teach intro (as
>I just did for 3 hours or so), then it can't be used very well to
>indoctrinate the students to worship the "economic way of thinking." Of
>course, that's the usual contradiction in management relationships, of
>trying to get the employees to do stuff that they wouldn't normally do.
>There are important ways to get us to do it, such as having a limited
>number of textbooks, of threatening underlings with not getting tenure
>and/or promotion, etc. And it usually turns out that it's much easier to
>teach the simplistic pap than to teach a more sophisticated and realistic
>vision of economics.
>
>One thing that left-wing economists need to do is to develop ways to
>explain the more sophisticated and realistic economics in simple ways. I
>thought that Bowles & Edwards' textbook did a pretty good job here. BTW, a
>new edition will come out in a few years, by Sam Bowles and Frank
>Roosevelt. (It's been delayed since Frank's been sick. I don't know the
>details.)
>
>Jim Devine jdevine@xxxxxxx &  http://bellarmine.lmu.edu/~jdevine
>
>