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I think that Professor Lipsey's point about advanced, or at least intermediate undergrad
texts, is all too well taken. I have the impression that questions about orthodox
viewpoints may be even less welcome at that level than at the Principles level, where at
least doubts can be snuck in by talking about various real world policy problems.
 
A very stupid but consistent way to bring in a downward sloping AD curve, although not of
much use at the Principles level, is to assume a weak monetarist classical world in which
V is constant but money neutrality does not hold. This gives an AD curve that is a
rectangular hyperbola for a fixed nominal GDP, with the level of the GDP given by the
money supply. There were papers in the 80s that took such an approach.
 
In the first edition of his Principles text, Colander pointed out that the AD curve can be
vertical, a point I have also made in published work. But, I gather that market pressure
through his publisher forced him to back off that rather interesting line.
 
Barkley Rosser 
 
 
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