Re: Re: Re: Re: Re: intro macro text

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

Jim,
     Not bad.  Pretty close to what I do.
     Next time I go out with you and Peter
Dorman and Max Sawicky, I shall call us all by
code names beginning with H.  You'll be "Holy
Father," Peter will be "Hoffman," Max will be
"Hoffa," and I'll be "Horse Thief,"  :-).
Barkley Rosser
-----Original Message-----
From: Jim Devine <jdevine@xxxxxxxxxxxxxxx>
To: pen-l@xxxxxxxxxxxxxxxxxxx <pen-l@xxxxxxxxxxxxxxxxxxx>
Date: Wednesday, August 30, 2000 2:45 PM
>Subject: [PEN-L:986] Re: Re: Re: Re: intro macro text


>At 02:10 PM 8/30/00 -0400, you wrote:
>>I disagree that AS/AD is inherently "anti-Keynesian." For the umpteenth
>>time, go look at Chapter 21, Section IV of Keynes's General Theory.
>
>also look at Tobin's ASSET ACCUMULATION AND ECONOMIC ACTIVITY (1980, p.
>17). He's got an AD curve with the "wrong" slope, so that falling wages and
>prices lead to a _falling_ quantity of real GDP demanded.
>
>If forced to use an AS-AD diagram, one solution is to draw the AD curve as
>vertical (making a contrast between the textbook and the real world). This
>encourages an emphasis on the AS curve, which should be flat to the left
>and then become increasingly steep as the economy moves to higher levels of
>real GDP. This is due to bottlenecks, not diminishing returns (something
>that NC economists typically don't understand). Again, the textbook vs.
>real-world distinction is quite a useful rhetorical strategy, especially
>since it has quite a large grain of truth in it. (You can also use this
>tactic with the AS curve.) One can teach the "tools" while trying to make
>them more realistic.
>
>The vertical AD curve (which becomes upward-sloping in severe depressions)
>also allows a clean link between the Keynesian Cross diagram.
>
>Jim Devine jdevine@xxxxxxx &  http://bellarmine.lmu.edu/~jdevine
>
>