Procrustean Art of Backtracking: “Long-run AS Curve”

 

To begin, we have in the AS-AD model the real GDP [Y= (nominal GDP)/ (the price level)] on the abscissa and the price level (P) on the coordinate.

 

             Some Q&A’s, first: 

1)     What is “the price level” (P)? Ask macroeconomists, please.

2)     What is “the real GDP”? Ask macroeconomists, please.

3)     What is a “long run” like? Ask macroeconomists, please

4)     What is “AS (for aggregate supply)”? Ask macroeconomists, please.

5)     What is a “curve” like? Ask macroeconomists, please.

6)     What is “the long-run AS curve”? Ask macroeconomists please.

7)     How are “the price level” for GDP and “the price level” on the ordinate different? That’s a great question, but again “Ask macroeconomists, please.”

 

Among the Rest of Us. They say “the long run AS” but mean “the natural level of output.”

1)     Is “the natural level of output” a curve? Well, your guess is as good as mine.

2)     Do people want the economy to stay on this year’s natural level for “the long run”? Well, your guess is as good as mine.

3)     Is “the long-run AS curve” a misnomer? Well, your guess is as good as mine.

4)     Are macroeconomists intellectually honest? Well, your guess is as good as mine.

 

5)     Is the market a mechanism or an organism? Absolutely positively the latter.

6)     Is the economy a mechanism or an organism? Even more so.

7)     Can in the economy be anything like a natural level of output?

No, never, if in Here on earth.

Nowhere in Here, except for in Eternity.

8)     When’ll our body be on the natural level? Don’t even think about it, please!

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