tag:blogger.com,1999:blog-1740670447258719504.post5501604224410896153..comments2024-03-27T03:00:27.024-04:00Comments on Facts & other stubborn things: Saying it's a demand problem just buys you a seat at the tableEvanhttp://www.blogger.com/profile/12259004160963531720noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-1740670447258719504.post-12352104835615719812012-06-23T16:44:21.100-04:002012-06-23T16:44:21.100-04:00Dan in fairness Soltas has a lot more to say than ...Dan in fairness Soltas has a lot more to say than just that it's a demand problem-not that I'm neceesarily all in on Market Monetarism. <br /><br /> In reality though there is still a lot of flat earthers out there who don't agree and think all that matters is supply. If only it were so that we can just laugh off RBC. The GOP for starters believes in the supply side story and ABCT still has wide currency. <br /><br /> If you listen to Fischer or Bulliard you see even some Fed people themselves seem partial to supply and "structural" problems.Mike Saxhttps://www.blogger.com/profile/01360689916550576484noreply@blogger.comtag:blogger.com,1999:blog-1740670447258719504.post-76329220121826235422012-06-18T11:30:09.681-04:002012-06-18T11:30:09.681-04:00Right - that's largely my point when I say tha...Right - that's largely my point when I say that this answer just buys you a seat at the table. There are a lot of other things to discuss once you establish something is going on with demand. Once we're done laughing off Casey Mulligan and RBC types, there's a lot more left to discuss.<br /><br />Jonathan had a good post the other day about ABCT as a demand-side theory.Daniel Kuehnhttp://www.factsandotherstubbornthings.blogspot.comnoreply@blogger.comtag:blogger.com,1999:blog-1740670447258719504.post-32201887011429385572012-06-18T11:24:26.450-04:002012-06-18T11:24:26.450-04:00It must be my incurable stupidity in that I do not...It must be my incurable stupidity in that I do not see how this is an adequate answer. Suggesting that a fall in aggregate demand is responsible for the recession is incomplete.<br /><br /><br />When I hear that aggregate demand has fallen, it means to me that people are demanding fewer goods and services altogether. A change from one service to another would not represent a change in total demand, but sectoral demand. In order for aggregate demand to fall, it seems to me that total incomes have fallen. But how can this be? People haven't stopped desiring things; so they must have less money for which to buy things.<br /><br />If this is right as it is, it only pushes the question back. If a fall in aggregate demand means a fall in aggregate income, what caused the fall in aggregate income? It's not enough to say "people stopped buying as many things as they did before X happened," the relevant question is why? And this is why ABCT, PSST, or some explanation including an analysis of the <i>fundamentals</i> of the economy are required. We need to look at the capital structure, the relationships between interest, liquidity, and capital intensiveness, and etc. <br /><br />It's simply intellectual laziness to stop at "people need to spend more."Mattheus von Guttenberghttps://www.blogger.com/profile/09404889240800715511noreply@blogger.com