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Keynesian Theory and the AD-AS Framework: A Reconsideration

Author

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  • Amitava K. Dutt

    () (University of Notre Dame)

  • Peter Skott

    () (University of Massachusetts Amherst)

Abstract

Contrary 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

Suggested Citation

  • Amitava K. Dutt & Peter Skott, 2005. "Keynesian Theory and the AD-AS Framework: A Reconsideration," UMASS Amherst Economics Working Papers 2005-11, University of Massachusetts Amherst, Department of Economics.
  • Handle: RePEc:ums:papers:2005-11
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    References listed on IDEAS

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    Cited by:

    1. Peter Skott, 2010. "The Great Detour," UMASS Amherst Economics Working Papers 2010-07, University of Massachusetts Amherst, Department of Economics.

    More about this item

    Keywords

    AS-AD; Keynes; New Keynesian theory; microeconomic foundations;

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
    • O11 - Economic Development, Innovation, 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

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