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Dutt and Skott on AD curve
I can't figure out the derivation of Dutt and Skott's aggregate demand (AD)
curve in their Summer 1996 EEJ article "Keynesian Theory and the Aggregate
Supply/Aggregate Demand Framework". I fear my algebra skills may be too
rusty, and have run into absolute dead ends on a couple of different
approaches. They present the AD curve as:
P = aWsY/(sY-I(r)) where a is average labor productivity level, W is nominal
wage level, Y is the income level, s is the savings rate, an I(r) is the
investment function, r being interest rates.
Has anyone out there worked through this one before, or does anyone have an
e-mail address for either of these authors? I noticed it bears a distant
resemblance to one of Keynes' fundamental equations in the Treatise on
Money, and haven't seen an AD curve expressed this way before.
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