Re: Why economists do not care about high rates of unemployment w

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

FROM:  Paul Davidson
"      Economics Department
"      523 Stokely Management Center  (615) 974-4221
Dear Barkeley: Sure you do goad! The nonlinear multiple equilibriumists
who argue "that demand-side policies can be used to push the economy towards
a more 'desirable' equilibrium" can not be presenting a general theory. They
most assume the non-linearities are of a certain magnitude and direction so tha
t, for example, more 'desirable' equilibriums are stable. Once you insist that
nonlinearities are the essence of the unemployment problem, then, if you are
going to claim government can achive a more 'desirable' equilibrium than the
free market, the nonlinearities must be "well-behaved". Unfortunately, as a gen
eral case, nonlinearities can be "ill-behaved" as well as well-behaved, so that

one cannot present a universal case for government interference with the free
market outcome. But I am sure that chaos theorists only deal with well-behaved
chaos.

Have a good day!____Paul Davidson
))))_ fax # (615) 974-1686