Keynesian Theory and the Aggregate-Supply/Aggregate-Demand Framework: A Defense
33 Pages Posted: 20 Jul 1998
Date Written: March 1996
Abstract
This paper defends the Aggregate-Supply/Aggregate-Demand framework against recent criticisms by Barro and others. Using four models - a neoclassical-synthesis Keynesian, a monetarist mark I, a rational expectations/new classical, and a Kaleckian/post-Keynesian - based on this framework, it is shown that it provides an internally-consistent and potentially useful teaching tool, that Keynesian versions of it do follow some of Keynes's ideas, that a Kaleckian/post-Keynesian version is consistent with empirical data, and that the criticisms by Barro and others are unwarranted.
JEL Classification: E10
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
The Case for Rules in the Conduct of Monetary Policy: A Concrete Example
-
Stochastic Trends and Short-Run Relationships between Financial Variables and Real Activity
By Toru Konishi, Valerie A. Ramey, ...
-
Trade, Capital Accumulation and Structural Unemployment: An Empirical Study of the Singapore Economy
By Hiau Looi Kee, Hian Teck Hoon, ...
-
A New Empirically Weighted Monetary Aggregate for the United States
By Leigh M. Drake and Terence C. Mills