IDEAS home Printed from https://ideas.repec.org/p/wii/wpaper/4.html
   My bibliography  Save this paper

Fallacies in Aggregate Demand/Supply Analyses

Author

Listed:
  • Amit Bhaduri
  • Kazimierz Laski
  • M. Riese

Abstract

The aggregate demand (AD)/aggregate supply (AS) framework as presented in almost all textbooks is logically inconsistent, because it seperates the demand side from the supply side. Due the the circular flow nature of the macroeconomic process, however, production/supply and income/demand cannot be dichotomised. Specifically it is shwon that the AD/AS apparatus implies incompatible levels of employment for all positions out of equilibrium. A reformulated aggregate demand schedule, which avoids these inconsistencies, typically has a positive slope; together with the positively sloped AS curve equilibrium thus becomes unstable.

Suggested Citation

  • Amit Bhaduri & Kazimierz Laski & M. Riese, 1994. "Fallacies in Aggregate Demand/Supply Analyses," wiiw Working Papers 4, The Vienna Institute for International Economic Studies, wiiw.
    • Handle: RePEc:wii:wpaper:4
    as

    Download full text from publisher

    File URL: https://wiiw.ac.at/fallacies-in-aggregate-demand-supply-analyses-dlp-4559.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. A. Bhaduri & K. Laski & M. Riese, 1999. "Effective demand versus profit maximization in aggregate demand/supply analysis: a dynamic perspective," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 52(210), pages 281-293.
    2. Martin Riese, 2016. "Kazimierz Laski (1921-2015): ein engagierter Kaleckianer," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 42(1), pages 119-129.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wii:wpaper:4. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Customer service (email available below). General contact details of provider: https://edirc.repec.org/data/wiiwwat.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.