Keynesian Theory and the AD-AS Framework: A Reconsideration
AbstractContrary to what has been argued by a number of critics, the AD-AS framework is both internally consistent and in conformity with Keynes’s own analysis. Moreover, the eclectic approach to behavioral foundations allows models in this tradition to take into account aggregation problems as well as evidence from behavioral economics. Unencumbered by the straightjacket of optimizing microfoundations, the approach can provide a useful starting point for the analysis of dynamic macroeconomic interactions. In developing this analysis, the AD-AS approach can draw on insights from the Post Keynesian, neo-Marxian and structuralist traditions, as well as from the burgeoning literature on behavioral economics. JEL Categories: E12, O11, B22, B41, B50
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Bibliographic InfoPaper provided by University of Massachusetts Amherst, Department of Economics in its series UMASS Amherst Economics Working Papers with number 2005-11.
Date of creation: Aug 2005
Date of revision:
AS-AD; Keynes; New Keynesian theory; microeconomic foundations;
Find related papers by JEL classification:
- E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
- B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
- B50 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-08-13 (All new papers)
- NEP-HPE-2005-08-13 (History & Philosophy of Economics)
- NEP-MAC-2005-08-13 (Macroeconomics)
- NEP-PKE-2005-08-13 (Post Keynesian Economics)
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