Re: Keynes and competition

[PHILIPPE BURGER <mwburgph@xxxxxxxxxx>]

John,

I agree, the assumption that firms have perfect information cannot be
reconciled with an uncertain future.
My reference to Say's Law was just that if you can expect to sell (supply)
whatever you want, it is a small step to saying supply creates its own
demand.  I agree that the perfect competition model is not a very useful
depiction of reality and that competition, even between small firms, looks
different.  Issues like rivalry etc play a role.  What I wanted to show is
that even if one accepts some notion of flat demand curves, it does not
invalidate the macro argument of Keynes.  In a system where effective demand
determines output it still will be the industry demand curve that limits
output.

Philippe