Barkley sees no harm in using the AS/AD device to explain stagflation. 
And David claims that we should conceive of AS/AD and IS-LM as didactic 
devices to help teachers explain policy. In both cases the idea of 
simplicity is invoked as a justification, although with David it is not 
completely clear whether he supports these devices or whether he is just 
reporting that the number one text uses them. It is worth remembering 
that this thread began with an observation that it is the textbooks that 
were responsible for the myth described in the title. It seems to me 
that Barkley and David are, at least implicitly, supporting the idea 
that textbooks have a legitimate use in perpetuating myths.

It also seems me that to say that AS/AD should be used in econ textbooks 
is analogous to saying that genesis theory should be used in high school 
biology textbooks to explain the history of life on earth and the 
diversity of species. It is certainly easier to attribute these to God 
than to try to teach what scientists have discovered (and not 
discovered) and how they have done so.

We can explain stagflation, the effects of tax cuts, etc. in many ways. 
To explain it with AS/AD and IS-LM diagrams that students are unable to 
comprehend or that they are likely to comprehend wrongly, seems to me 
inconsistent with the chosen mission of the teacher. It would be better 
-- and a whole lot more economical -- to teach that macroeconomists are 
brilliant people who we depend on to help us make policy decisions. 
After all, if this were not so, how could it be that the great 
depression has not been repeated, that the U.S. has had 16 years of more 
or less uninterrupted growth without significant inflation or 
unemployment, and how the world economy has been growing at an 
unprecedented clip for half a century? (It goes without saying that no 
economist I know believes that any of these events are due to the 
brilliance of macroeconomists who help governments to make policy.)

What else could we teach in macro policy? We could teach the history of 
how politicians and government bureaucrats -- often claiming to follow 
some economic theory -- have botched the job.Yet they seem to have 
stumbled into a successful recipe, which is perhaps the way it must 
always be in a democracy. On this point I would refer the reader again 
to Robert Mundell's interpretation of the 20th century.

Mundell, R. A. (2000) "A Reconsideration of the Twentieth Century." The 
American Economic Review. 90 (3): 327-340.

Hopefully, Kevin has chose something better than what we have typically 
seen.


Pat Gunning