The Text Book Black Magic, or, How to Make the Keynes Theory Disappear

Roy H Grieve

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Abstract

This paper looks into the question of how it can come about that, not uncommonly, contemporary macro textbooks start their exposition in Keynesian fashion, but end up presenting an essentially classical account. Using a typical textbook for illustration, our diagnosis is that when the AD/AS model is introduced into the discussion, then things go wrong. The AS analysis rehabilitates a pre-Keynesian conception of the working of the labour market, while uncritical and ill-informed use of the AD function effectively ‘tames’ aggregate demand by making it manipulable in such a way as to accord with conditions of labour supply. Not surprisingly, Keynes’s vision of the functioning of the macro system gets lost along the way.
Original languageEnglish
Place of PublicationGlasgow
PublisherUniversity of Strathclyde
Pages1-47
Number of pages47
Volume09
Publication statusPublished - 2009

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Keywords

  • ad/as model
  • labour market
  • keynesian and classical models

Cite this

Grieve, R. H. (2009). The Text Book Black Magic, or, How to Make the Keynes Theory Disappear. (11 ed.) (pp. 1-47). Glasgow: University of Strathclyde.