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Subject:
From:
[log in to unmask] (Alan G Isaac)
Date:
Tue Mar 27 13:11:39 2007
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Pat Gunning wrote: 
> Keynesian macroeconomics is built on a foundation that 
> almost completely disregards this most important idea. In 
> this field, the decision to produce capital goods is 
> completely disconnected from the decision to produce 
> consumption goods. 

I really do not understand this claim.  Surely you do not 
mean that Keynes or "Keynesians" ignored considerations of 
profitability?

Does it bother you that Keynes in the GT dealt with a time 
horizon where the macroeconomic contribution of investment 
to demand was important than the contribution to supply?  
This seems both useful and realistic when it comes to his 
project.  There are plenty of "Keynesian" models that 
incorporate a longer period so that both effects manifest.

Cheers,
Alan Isaac






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