On Thu, 18 Apr 1996, Blair Sandler wrote
>
> Hall & Taylor have this idea that in the long run the classical model and
> Say's Law are correct: supply creates its own demand, output is determined
> by the size of the labor force, capital stock and technology, and aggregate
> demand merely influences the price level; while in the short run prices are
> "sticky" and output is largely driven by AD. If I ignore the difficulties
> of thinking of dynamic systems in static terms, if I forget the awkwardness
> of the "long-run," if I pretend I don't believe in class exploitation and
> avert my eyes from the politics of these authors, I can almost see a kind
> of twisted logic to this model.
>
> What are the obvious (to all but me?) criticisms of this model in its own
> terms, i.e., suitable for a low-level intermediate undergraduate macro
> class?
>
> Thanks all.
>
> Blair Sandler
> [EMAIL PROTECTED]
>
Blair: I have been using H&T off and on since the first edition; I've
used just about every intermediate text around over the past 25 years or
so. They are all flawed since they disagree with my views ("truth") on
at least one point. I keep going back to H&T for several reasons: (1) the
New Keynesian model seems a closer representation of reality than any of
the other members of the family of "mainstream" or "orthodox" schools of
macroeconomics; (2) the more-or-less "heterodox" or "critical" or
"dissenting" texts with which I'm familiar (Brown, Cherry, Sherman and
Evans, Darrity and Galbraith, Peterson) all had some important
shortcoming (crazy, hard to interpret diagrams or serious and important
typographical errors, or too much ax grinding)...so that i would use them
once or twice and go back to H&T; (3) H&T have a nifty simulation and
data package that I think is a useful pedagogical tool and students
consistently tell me it helps them.
But I'm ending a term with it and I find myself wanting to set fire to
it. The chapters on investment and the labor markets are almost
psychotic in their unreality. But I think that it is good for serious
students of economics to work through a good, solid, internally
consistent model, representing a set of more-or-less reasonable
assumptions about how the economy works. And if that text is compared
and contrasted to a set of articles that depict reality perhaps more
closely, the students seem to get the picture. For instance they found
Keynes and Minsky on investment much easier to understand, and felt they
offered superior explanations of the process. And they figured it out; I
hint at my own take on reality. But hey, I don't know TRUTH.
Chris Niggle
Redlands (aka Deadlands) California
Where Cindy Crawford is filming a Pepsi commercial right outside my
office window. Smiling this way and waving even as I type.
Life is Good
