Making Sense of the Aggregate Demand-Supply Model
By: Bhaduri, Amit.
Contributor(s): Laski, Kazimierz | Riese, M.
Material type:
BookSeries: wiiw Working Papers: 5Publisher: Wien : Wiener Institut für Internationale Wirtschaftsvergleiche (wiiw), 1995Description: 16 S., 4 Figures, 30cm.Subject(s): Aggregate demand (AD) | aggregate supply (AS) | incompatibility of AD/AS | consistent AD/AS reformulations | profit maximization and multiplier analysis | disequilibrium theory and short side of the marketOnline resources: Click here to access online Summary: This paper questions the validity of using the aggregate demand (AD) and aggregate supply (AS) framework for analysing macroeconomic issues. AD derived from the Keynesian income-expenditure approach cannot be reconciled logically with AS derived from the profit maximization postulate in out-of-equilibrium positions. The paper shows two routes to achieving consistency, either by taking recourse to Kalecki's work or by entirely reformulating the analysis along neo-classical lines. Using these two polar cases, it reinterprets the model underlying Keynes' General Theory and modern disequilibrium analysis based on "rationing".
| Cover image | Item type | Current library | Home library | Collection | Shelving location | Call number | Materials specified | Vol info | URL | Copy number | Status | Notes | Date due | Barcode | Item holds | Item hold queue priority | Course reserves | |
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| Paper | WIIW Library | 5.700/5 (Browse shelf(Opens below)) | Available | 1000010004558 |
This paper questions the validity of using the aggregate demand (AD) and aggregate supply (AS) framework for analysing macroeconomic issues. AD derived from the Keynesian income-expenditure approach cannot be reconciled logically with AS derived from the profit maximization postulate in out-of-equilibrium positions. The paper shows two routes to achieving consistency, either by taking recourse to Kalecki's work or by entirely reformulating the analysis along neo-classical lines. Using these two polar cases, it reinterprets the model underlying Keynes' General Theory and modern disequilibrium analysis based on "rationing".
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