On May 11, 2008, at 9:05 PM, Jim Devine wrote:
Sandwichman wrote:
"this long run is a misleading guide to current affairs. In the long
run we are all dead. Economists set for themselves too easy, too
useless a task if in tempestuous seasons they can only tell us that
when the storm is long past the ocean is flat again."
Tom, do you know when/where he said this?
Tract on Monetary Reform (1928?)
it reminds me of a big problem with the orthodox (neoclassical) view
of the long run. It's assumed that the nature of the long run is
determined ahead of time (or at least the real, as opposed to
monetary, aspects are pre-determined). For lack of a better term, the
alternative or post-Keynesian view is that the nature of the long-run
result is determined partly by the process of getting there (path
dependence, hysteresis). Persistent high growth of demand affects the
amount of supply (while for the orthodox, supply is given). Persistent
high demand undermines the role of structural unemployment, allowing
those with "inadequate" skills to get on-the-job training, etc. It
also stimulates labor productivity (Verdoorn's "law").
--
Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own
way and let people talk.) -- Karl, paraphrasing Dante.
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Shane Mage
"Thunderbolt steers all things...it consents and does not consent to
be called Zeus."
Herakleitos of Ephesos
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