Re: Joining 'em or beating 'em

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

FROM:  Paul Davidson
"      Economics Department
"      523 Stokely Management Center  (615) 974-4221
I must agree with David Colander regards his comment on Marshall vs. Walras.
Further, Keynes (no slouch at mathematics himself) pointed out that Walras's
account (among others) "must be erroneous" (pp. 176-7).
      Concerning "joining them or beating them", I find that new Keynesians
such as Krugman and Stiglitz and others, e.g., Sachs, Fred Bergsten , etc.
are too influential on policy matters. Secretary Bentsen continually
flip-flops on the (FEER?) target dollar-yen exchange rate depending whether
he is being briefied by Bersten and Williamson on the International Economics
think-tank in Washington, or by Alive Rivlin and the Brookings group who
are worried about the bond market! Not influential in policy -- C'mon give
me a break, Jamie!
Joe Stiglitz,though not making headlines, is really dangerous in my
view because his theoretical framework is so askew! For example, despite his
New Keynesian appelation, he claims in his textbook (1992, p. 367) that the dow
nward sloping marginal product curve for labor must be the demand curve for lab
or because it is the algebraic equivalent of equating price to marginal costs!
He has bought Lucas's claim that there is no such thing as involuntary
unemployment hook,line, and sinker. Now Joe's common sense must tell him that
in recessions there is involuntarily unemployment -- but that merely means that
his common sense gets in the way of his logical consistency.

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