HAYEK AND THE CLASSICAL ECONOMISTS WERE RIGHT

By Greg Ransom, on February 3rd, 2011%

The demand for output is not a demand for labor.

ht Instapundit.

Comments are closed   aggregate demand, Mill

FALKENSTEIN ON MACROECONOMICS & THE GENIUSES AT MIT

By Greg Ransom, on February 2nd, 2011%

Here.

Hayek’s early work on business cycles focused on misalignments in the structure of production. Alas, this was basically impossible to formalize. Keyenes’s model, meanwhile, was adopted into the Hansen-Hicks synthesis that looked a lot like the simple Supply/Demand equations economists were used to, so everything seemed copacetic. A bad idea, in a tractable model, . . . → Read More: FALKENSTEIN ON MACROECONOMICS & THE GENIUSES AT MIT

Comments are closed   aggregate demand, Macroeconomics

ARNOLD KLING — HAYEKIAN OF THE DAY

By Greg Ransom, on January 29th, 2011%

Recalculation thinking vs AS-AD thinking.

Sort of like the difference between adaptation thinking at the margin in Darwinian biology versus Platonic / Aristotelian thinking about biological kinds. Kling misses the fact that one kind of thinking provides a satisfying naturalistic/non-magical causal mechanism, while the other appeals to “And Then A Miracle Occurs” (see the work . . . → Read More: ARNOLD KLING — HAYEKIAN OF THE DAY

Comments are closed   aggregate demand, Kling
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The tautological propositions of pure equilibrium analysis are not directly applicable to the explanation of social relations. — F. A. Hayek
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