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From:
[log in to unmask] (Barkley Rosser)
Date:
Thu Feb 8 08:06:13 2007
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Robert Leeson's point is correct if the issue is what is the best way to 
conceptualize
aggregate demand.  This hyperbolic formulation is clearly a curious 
theoretical
construct that one would never observe in the real world if one could see AS
shifting without AD shifting, and for the reasons he states.  Personally, I 
prefer
AD curves whose downward slope is justified on such boring grounds as 
international
substitution effects, wealth ("Pigou") effects, and interest rate ("Keynes") 
effects.
But some on this list have been busy declaring that AD is simply a useless 
concept
for various reasons, with this long proven and accepted by everybody and 
anybody
who has a grain of sense or knowledge of what has been going on in 
economics.

Barkley Rosser


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