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There were a number of books and articles on the beast -- Rao (Rao, The Debate about
AS/AD, Routledge Publishers) has a recent one -- but it continues in the texts. As Chas
suggests, I attempted to salvage it, but there was no market for it, and my latest
editions simply went with the standard approach, attempting to tell students the problems
with it. It started as an attempt to integrate inflation into the Keynesian model, but it
is now a model that essentially eliminates the Keynesian model, as many books are not even
presenting the Keynesian model as the derivation of the AD curve. Some new books are
putting inflation on the horizontal axis, and are using an assumed Taylor rule monetary
policy to "explain" the downward sloping AD curve.
 
The real problem, in my view, is that the macro economy is a complex system, and cannot be
described by simple graphs--which are meant to convey understanding to students. The story
is in dynamics, not equilibrium. The reality is that we simply don't understand much of
the fluctuations in the economy in a clear way, which is evident from our difficulty in
predicting the movements of the aggregate economy.
 
Dave Colander 
 
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