The Keynesian Illusion

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I agree

michele boldrin 29/3/2015 - 05:57

So let's take time to think about it. In particular

- do not confuse national income accounting conventions with "behavior": VA is the effect of "demand" (of factors) as much as C+I is "supply" (of goods) ... and they are always equal because of the individual budget constraints.

- when demand for a good goes down respect to expectations this may be due to MANY things: wrong expectations, wealth shock, a shock to productivity, a change in tastes, a change in relative prices ... and so on.