Circular Argument

["John Tyler" <j_tyler@xxxxxxxxxxx>]

Dear Mr. Isaac,

You have forced me to clarify my thinking, and the problem is more serious
than I thought.  What we have is an equation that has not been completely
solved for the dependent variable, and there is some question whether it can
be solved.  That is, we have

       i = MP - d(i).

It is immediately clear that one solution is for a zero rate of interest,
but it is not clear that there are any others.  If we try to solve for i
completely, we get a real rat's nest.

It is also clear that there is no question of simultaneity or general
equilibrium.

John Tyler


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