Journal of Economic Perspectives: Vol. 9 No. 3 (Summer 1995)
Print Article Summary Export Citation
Sign up for Email Alerts Follow us on Twitter
The Stories We Tell: A Reconsideration of AS/AD Analysis
Colander, David. 1995. "The Stories We Tell: A Reconsideration of AS/AD Analysis." Journal of Economic Perspectives, 9(3): 169-188.
This paper explains that the AS/AD model as currently presented in the tests is seriously flawed. It does not fulfill the minimum requirement of a model: logical consistency. Its component parts are derived from models that reflect different, and inconsistent, models of the economy. Moreover, the appropriate disequilibrium adjustment story that appropriately accompanies it is inconsistent with observed reality. In this alternative model, Keynesian adjustment occurs through shifting AS/AD curves along institutionally determined price level vectors rather than through movements along the AS/AD curves.
Article Full-Text Access
Full-text Article (Complimentary)
Colander, David (Middlebury College)
A22: Economic Education and Teaching of Economics: Undergraduate
| Login to post a comment