Barkley, my argument regarding the great depression is that it is unwise to neglect the causes of the inflation, unemployment and slow growth. Even if AD-AS analysis was correct and complete, which we agree it is not, teaching it leads to bias against studying the real causes of these problems. It is better to teach what we have learned about the causes of financial collapses. I would suggest that there is practically no danger today of a major financial collapse today. This is mainly because central bankers have finally learned, through trial and error under a regime of flexible exchange rates, about the effects of allowing the quantity of money to be tinkered with. So we need not be concerned with this cause of inflation, unemployment and slow growth. Therefore, there is no need to use the AD-AS framework to describe the great depression and there is the danger of bias. The same general principle about teaching AD-AS applies to stagflation, albeit the causes that AD-AS analysis leads one to ignore in this case are different. The cause of stagflation was a complex of forces that made the U.S. economy less competitive in the global economy. A nation that follows policies that reduce the international competitiveness of its human capital is likely to face one or more of the macroeconomic problems. To use the AD-AS framework to describe stagflation leads to a bias against studying the real causes of the problems and toward a belief that economists and government can solve the problems, regardless of their cause. It seems to me that today's students should be taught about the high degree of international economic integration, freely flexible exchange rates, and the steady decrease in relative importance of the U.S. (and corresponding steady increase in the importance of other nations) in the global economy. Teaching AD-AS detracts from this. Pat Gunning