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

[FAC_BROSSER@xxxxxxxxxxxxxxxx]

Paul,
     No, you did not say chaotic equilibria HAD to be unstable,
just that a GENERAL THEORY is one that is linear without multiple
equilibria and where the unique one is stable.  I'v got news for
you.  The overwhelming consensus of empirical time-series research
is that although macro time series cannot be shown to be chaotic
(money supply continues to be claimed by some, and some micro
time series, especially pigs and cattle, continue to be), they are
almost certainly nonlinear stochastic.  For an excellent recent
review of where all this stands, see "Is Chaos in Economic Data?"
by Ted Jaditz and Chera Sayers, _International Journal of Bifurcation
and Chaos_, 1993, vol. 3, no. 3, pp. 745-755.
     I grant that you have been able to show unemployment equilibria
in linear models, but reality may be closer to the nonlinear multiple
equilibria world with a mixture of stable and unstable and many of
them also less than full employment.  We have argued this point before,
but I still contend that this is the more GENERAL THEORY, even if
certain simple-minded classicals who believe in unique stable equilibria
might be more convinced by your approach.  But I bet they won't be,
because they will consider your emphasis on uncertainty ruling out
rational expectations as "ad hocracy," unfair and untrue as that is.
Showing them that "bad equilibria" can arise even with their precious
rational expectations assumption strikes me as much more convincing.
(PS to Jim Devine:  I also support a Canadian-style "single-payer"
health plan.  Shame on you, Big Dave!)
Barkley Rosser
James Madison University