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THE TEXT BOOK BLACK MAGIC or how to make the Keynes theory disappear

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  • Roy Grieve

    (Department of Economics, University of Strathclyde)

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.

Suggested Citation

  • Roy Grieve, 2009. "THE TEXT BOOK BLACK MAGIC or how to make the Keynes theory disappear," Working Papers 0911, University of Strathclyde Business School, Department of Economics.
    • Handle: RePEc:str:wpaper:0911
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    File URL: http://www.strath.ac.uk/media/1newwebsite/departmentsubject/economics/research/researchdiscussionpapers/2009/09-11RHG.pdf
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    References listed on IDEAS

    as
    1. Roy H. Grieve, 1996. "Aggregate demand, aggregate supply, a Trojan horse and a Cheshire cat," Journal of Economic Studies, Emerald Group Publishing, vol. 23(4), pages 64-82, September.
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      Keywords

      AD/AS Model; Labour Market - Keynesian and Classical Models;

      JEL classification:

      • A22 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Undergraduate
      • A23 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Graduate
      • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
      • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
      • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical

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