Re: The Widow's Cruse

[Brett Haselton <haselton@xxxxxxxx>]

Can anyone out there ever get past the empirical absurdities of trying
to analyze Keynes without even taking a moment to understand the
Philosophical aspects of the Keynesian ideology.


-----Original Message-----
From: pkt-owner@xxxxxxxxxxxxxxxx [mailto:pkt-owner@xxxxxxxxxxxxxxxx] On
Behalf Of pdavidso
Sent: Wednesday, October 08, 2003 8:27 AM
To: Gunnar Tómasson
Cc: pkt@xxxxxxxxxxxxxxxx
Subject: Re: The Widow's Cruse


>===== Original Message From Gunnar Tómasson
><gunnar.tomasson@xxxxxxxxxxx>
=====
>On October 2, I posted the below message to PKT.
>
>Paul Davidson responded off-list as follows:
>
>Gunnar did you ever note that Keynes specifically changed his
>definition in the GT from that used in the TM?
>
>To which I replied:
>
>Yes.
>
>There, the Widow's Cruse is embedded in Y = C + I.
>
>****
>
>Paul has yet to respond.


I have not responded because we are not communicaating -- and your
succinct
statements are unintelligible to me. Sorry but it is not likely that any

further discussion between us will be fruitful.


>
>At issue is the distinction between analytical and empirical economics
>as
practiced Keynes and PKT economists, respectively.
>
>In one case, the precursor of the Y = C + I proposition entails a
>logical
absurdity, which is disregarded in the other case.
>
>Isn't that so, Paul?

It am not even sure what you mean  -- so I can't agree or disagree.

It would appear to me that you do not recognize that in the treatise on
money
Keynes is analyzing changes in demand with no change in employment or
output--
namely the market period of Marshallian analysis -- so that a change in
demand
leads to a change in the  spot (market period) price relative to the
forward
(short-run) supply price (or cost of production).  Thus an increase in
demand
raises spot prices relative to cost of production and leads to what
Keynes
called windfall profits on liquid consumption goods in the mmarket
period.

Paul