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Date: | Fri Mar 31 17:18:59 2006 |
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======================= HES POSTING ====================
On p. 40 of the General Theory Keynes wrote:
"To say that net output to-day is greater, but the price-level lower,
than ten years ago or one year ago, is a proposition of a similar
character to the statement that Queen Victoria was a better queen but not
a happier woman than Queen Elizabeth -- a proposition not without meaning
and not without interest, but unsuitable as material for the differential
calculus. Our precision will be a mock precision if we try to use such
partly vague and non-quantitative concepts as the basis of a quantitative
analysis."
Am I missing something, or is this a rejection of the concept of the price
level as a theoretically useful tool? Isn't the price level still an
important concept in macrotheory? Has Keynes been refuted or has this
view been seriously discussed in the Keynes literature?
David Andrews
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