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 Steve: You are more optimistic than I am regarding your friends willingnes
s to move from Macro back to micro. I have had similar discussions with my frie
nd and former neeighbor (when I lived in Princeton, N.J.) Alan Blinder. The
trouble is there are an almost inifinite number of ad hoc constraints one can
impose on the classical system when one moves "backwards" from macro-results to
 finding what variant of neoclassical microeconomic analysis will be compatible
 with our macro-equilibirum.  I believe the only way to make neoclassicals
recognize that their Imperial analysis is "without clothes" is to force them
to realize that in a nonergodic world -- even if all their other assumptions
hold -- and their are no ad hoc constraints-- the existence of full employ-
ment equilibrium can not be proved. Unfortunately nonlinearities may be a
sufficient condition for nonergodicity, it is not a necessary condition.
    But good luck on your optimism. I know however you will be disappointed.

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