The Aggregate Supply Curve: Keynes and Downwardly Sticky Money Wages

1985 ◽  
Vol 16 (4) ◽  
pp. 297
Author(s):  
Paul Wells
Keyword(s):  
Supply Curve ◽  
Aggregate Supply

Long Run Aggregate Supply Verticality: Fact or Fiction?

2001 ◽  
Vol 45 (1) ◽  
pp. 71-79
Author(s):  
John F. Walker ◽  
Harold G. Vatter
Keyword(s):  
Theoretical Model ◽  
Empirical Adequacy ◽  
Supply Curve ◽  
Empirical Testing ◽  
Clock Time ◽  
Aggregate Supply ◽  
Long Run ◽  
Continued Use

A presumed “long run” aggregate supply curve has become an accepted and widely incorporated construct in contemporary macroeconomics. Unfortunately, that theoretical model, with its vertical supply curve, has been subjected to hardly any empirical testing. The major thrust of the present analysis is to determine whether such testing will show if continued use of the concept is warranted as a virtual representation of the actual economy. The critique herein stresses the necessity for a clock-time format to examine the empirical adequacy of the LRAS construct. Using an arbitrarily chosen four year, minimal, “long run” model period, divided into two appropriate biennia of stipulated change, the analysis finds the LRAS curve empirically unsupported over the crucial second biennia.

On the Keynesian Aggregate Supply Curve: A Note

1987 ◽  
Vol 31 (2) ◽  
pp. 76-77
Author(s):  
Robert E. McAuliffe
Keyword(s):  
Supply Curve ◽  
Aggregate Supply

Macroeconomics and the L-Shaped Aggregate Supply Curve

2013 ◽  
pp. 244-264 ◽  
Author(s):  
James Forder
Keyword(s):  
Phillips Curve ◽  
Supply Curve ◽  
Wage Determination ◽  
Marginal Product ◽  
Aggregate Supply ◽  
The 1950S

The “L-shaped aggregate supply curve” is routinely treated as nothing more than a primitive version of a Phillips curve. This is misleading because it is in fact a later reconstruction, based on a presumption of the superiority of the Phillips curve, of a well-developed theoretical outlook. That outlook saw the problems of inflation and unemployment as substantially separate ones. The theory of wage determination, in particular, was intensively studied with little reference to the level of unemployment and understood with little regard to the marginal product of labor. Contact with that vision was lost as econometric and other work on the Phillips curve developed, and this explains the later failure to appreciate the ideas of the 1950s. It is suggested that the older ideas are worth revisiting not just for their historical interest, but also on their merits.

scholarly journals Leisure and the Production Possibility Frontier: A Two-Step Pedagogy

2018 ◽  
Vol 64 (1) ◽  
pp. 123-130
Author(s):  
Gary M. Galles ◽  
Philip E. Graves ◽  
Robert L. Sexton
Keyword(s):  
Supply Curve ◽  
Not Given ◽  
Fixed Amount ◽  
Production Possibility ◽  
Production Possibility Frontier ◽  
Aggregate Supply ◽  
Trade Offs ◽  
Long Run ◽  
Economic Tools ◽  
Jel Classifications

The production possibility frontier (PPF) is a workhorse of economics principles texts, providing useful insights. However, its assumption of a given amount of labor can confuse students, who know that their willingness to supply labor is a variable, not given. That is, some will realize that there are actually many potential guns-butter trade-offs, one for each level of leisure chosen. That unexamined issue can undermine student buy-in to the concepts, and with it, the usefulness of the PPF and economic tools related to it and its “fixed amount of resources” assumption, such as the supply curves of microeconomics and the long-run aggregate supply curve of macroeconomics. However, that difficulty can be addressed using a two-step PPF presentation, which considers the simultaneous goods-leisure decision and the guns-butter possibilities consistent with it. It clarifies the analysis, as well as offering several benefits for economic instruction. JEL Classifications: A20, A22

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