Re: Colander and New Keynesian Economics

[Paul Davidson <PB108928%UTKVM1.BITNET@xxxxxxxxxxxxxxxxx>]

FROM:  Paul Davidson
"      Economics Department
"      523 Stokely Management Center     974-4221
Dear BarkleY: The "if"s etc put in as hedges by Grandmont, arazidas, etc. merel
y indicates that they are unhappy with the inevitable (i.e., long run) logical
consequences of their analytical framework. The if is just another "ad hoc"
constraint to make sure that their logic doesn't overwhelm their commonaense.
These are just weaker spirits than Lucas who at least is consistent with
his logical analysis. The fundamental issue that you refuse to face is
why not accept a logical analysis which is the most general case and
which, even in the long run, demonstrates the possibility of involuntary
unemployment equilibrium. Once we are at least logically consistent, then
our common sense and our thoughtful analysis provides a water-tight analytical
basis for developing useful policies. Paul Davidson

Have a good day!