Fallacy of Composition: AS-AD, a Model or Not
Spot question: How many kinds of models can we name? Two snap answers: 1) Macroeconomists: There are “so many models,” indefinitely many actually. 2) The rest of us: We can think largely of four kinds, namely, ① really moving, ② virtually unmoving, ③ invisibly exemplary and ④ Eternal. 11) Model or Not “Is the AS-AD Model a model?” It’s a great question except for the fact that the answer all depends. 1) Macroeconomists in Cambridge shall say, “Are you kidding me?” 2) The rest of us on the sidewalk, “Well, sort of.” First, the demand schedule (T -1 ) and the supply schedule are conceivable in the market for each product, an infinitely tiny microcosm out of the greatest macroscopic economy. By conception, ergo , househ...