Criticisms of Aggregate Demand and Aggregate Supply and Mankiw's Presentation
AbstractThis paper argues that the standard AD-AS framework as presented in intermediate macro- economic textbooks is (1) internally logically inconsistent and (2) empirically unrealistic. The logical inconsistency is because the AD and AS curves represent two mutually exclusive theories of the relation between output and the price level in the same economy. The empirical unreality is that it assumes that, when there is excess supply, prices will fall, and furthermore, falling prices will return the economy to full employment. Neither of these assumptions is valid for our economy today. The paper focuses specifically on Mankiw's presentation of AD-AS in his best- selling textbook.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Union for Radical Political Economics in its journal Review of Radical Political Economics.
Volume (Year): 42 (2010)
Issue (Month): 3 (September)
Contact details of provider:
Web page: http://www.urpe.org/
aggregate demand; aggregate supply; logically inconsistent; empirically unrealistic;
Find related papers by JEL classification:
- A22 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Undergraduate
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (SAGE Publications).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.