Economics Questions

Re: General Theory Chapter 20 and 21

ladyattis — Tue, 21 Jul 2009 01:01:36 GMT

MichaelEmmettBrady:

typical never read the general theory and are mathematically illiterate.

Why not be intellectually honest and not talk over people's heads? As for being illiterature of math, you can put together any formula that is mathematically true, but rarely can one tie it to reality in a cogent fashion.

Re: General Theory Chapter 20 and 21

Prelude To Ruin — Tue, 21 Jul 2009 00:47:12 GMT

MichaelEmmettBrady:

I have seen no criticisms of this so far how would you respond to this

Keynes defined P to be expected economic profit.The second line from the bottom of this footnote reads as " = delta P ", which is the same as" = dP".That should actually be " = delta P w subscript" due to either (a) a typographical error made by the printer in the GT or (b) because Keynes felt that it was obvious,since he divided D=Z through by w,to get Dw subscript = Zw subscript,which means that you must divide P by w.P is AUTOMATICALLY DEFINED IN TERMS OF WAGE UNITS.Pw subscript is equal to Dw subscript-N.Thus dP(or dPw subscript)=d(Dw subscript - N) =dDw subscript -dN.Simple integration gives the following result- Pw subscript=Dw subscript-N .Divide through by w and you obtain P=D-wN.Add wN to both sides.You get P+wN=D=pO or Z =D.Z=P+wN.w is the money wage.N is aggregate employment.p is the expected price level.O is real output,which is a function of N.D,the expected aggregate demand function,is thus equal to expected total revenue.Z,the expected aggregate supply function,is equal to total variable cost plus expected economic profit.

The same analysis and result is contained in footnote 2 on pp.55-56 of the GT.Keynes defines the derivative dZw subscript/dN=dphi(N)/dN =phi'(N)=1,where you use "d" instead of " delta " notation used by Keynes.Integrate to obtain Z=wN + C,where C is a constant of integration,after you divide through by w.We know that D=Z by definition and that D=pO from chapter 20.We get wN +C=pO or C=pO-wN once we subtract wN from both sides.By definition,C must be equal to actual profit if p is an actual price and expected profit if p is an expected price.Of course,if P=0,then you get Z=wN= total variable cost.(This is the case of constant returns to labor.Note that Keynes covered this case explicitly at the top of p.284, as well as on p.306 of the GT ,in chapter 21.)This,of course is the mistake that Don Patinkin made continuously from 1976-1989 in 3 books and 5 articles-failing to consider that Z is linear in both the diminishing returns and constant returns to labor cases.Of course,in the case of constant returns to labor,you would get a linear 45 degree cross representing the aggregate supply curve.The same mistake is made by all Post Keynesian economists like Sydney Weintraub, Paul Davidson,Douglas Vickers,Jan Kregel, Victoria Chick,Nevile,Skott and Dutt,etc.They fail to consider that Keynes worked with both cases, diminishing returns to labor as well as constant returns to labor,in his microeconomic analysis contained in chapters 20 and 21 of the GT.It is not surprising that the Post Keynesians can not deal with the technical analysis contained in chapters 20 and 21 of the GT and expressed by Keynes in the form of elasticities.Instead,they build their analysis on the claims of a mathematically illiterate economist named Dennis Robertson.It was Robertson who claimed that Keynes's theory of effective demand(D-Z analysis)was contained in chapter 3 of the GT.All Post Keynesians base their work on the assumption that Robertson was correct.Post Keynesians also confuse the D=Z locus,the aggregate supply curve,with Z,the aggregate supply function.All of these errors can be traced back to the original errors made by Dennis Robertson in correspondence with Keynes in Feb.-Mar.,1935 about the first 17 chapters of the GT.Keynes told Robertson very clearly that the anaysis of his D-Z model was in a chapter called the Employment Function.Chapter 20 of the GT is titled," The Employment Function ".After seventy years it is time for economists to read this chapter upon which KEYNES SAID EVERYTHING DEPENDS.

Nobody here cares about obscure mathematical errors in theories that we hold to be entirely illegitimate in the first place. Your formatting is atrocious. Your false sense of superiority for understanding introductory calculus is made even more ridiculous by your inability to use a space bar properly. Who let you on the internet?

Re: General Theory Chapter 20 and 21

Jon Irenicus — Tue, 21 Jul 2009 00:20:30 GMT

16, Re-read all my comments on amazon lets see if you can actually respond to them.

Or, you can do as I said. Or can't you? Perhaps you can only speak in mathematics? Frankly I don't have the time or the inclination to read all the garbage you've posted on amazon. So, get to it.

Re: General Theory Chapter 20 and 21

DanielMuff — Tue, 21 Jul 2009 00:16:06 GMT

You have no idea how hard and frustrating it is to read anything you write when it contains the misuse of commas and periods. You could have at least revised what you wrote on Amazon for when you transferred it onto this forum.

Re: General Theory Chapter 20 and 21

MichaelEmmettBrady — Mon, 20 Jul 2009 23:46:35 GMT

he cites him once. http://www.marx.org/reference/subject/economics/keynes/general-theory/ch16.htm

Re: General Theory Chapter 20 and 21

Esuric — Mon, 20 Jul 2009 23:45:40 GMT

MichaelEmmettBrady:
Re-read all my comments on amazon lets see if you can actually respond to them.

I'd rather poke out my eye with a spoon.

Re: General Theory Chapter 20 and 21

Esuric — Mon, 20 Jul 2009 23:44:47 GMT

MichaelEmmettBrady:
16

How many times does he cite Bohm-Bawerk?

Re: General Theory Chapter 20 and 21

MichaelEmmettBrady — Mon, 20 Jul 2009 23:39:29 GMT

16, Re-read all my comments on amazon lets see if you can actually respond to them.

Re: General Theory Chapter 20 and 21

Esuric — Mon, 20 Jul 2009 23:34:05 GMT

MichaelEmmettBrady:

Robertson's mathematical skills were on a par with those of Henry Hazlitt.Both of them would be able to read books that were at the 6th grade pre-algebra level.Keynes wrote the introduction to his D-Z model ,of his theory of effective demand in chapter 3 of the GT, at the pre-algebra level so that the vast majority of 1930's economists would be able to follow what he was doing.Keynes told Robertson point blank that it was a later chapter, titled The Employment Function,that contained his formal,mathematical, technical analysis.This chapter,of course,is chapter 20 of the GT.Robertson could not read this chapter because he was ignorant of calculus.In his original 1955 contribution to the Economic Journal's 1954-56 exchange over the aggregate supply function with Hawtreu and De Jong ,he had to ask Harry Johnson to write a mathematical appendix showing what the functional relationships were in chapter 3 of the GT.Johnson got it wrong right out of the starting gate when he accepted Robertson's claim that Z,the aggregate supply function,equaled pO,where p is the price level and O is output,which is a function of N,total employment.In fact ,it is D=pO,where D is the expected aggregate demand function, and not Z=pO.It is easily proven through simple integration,both in footnote 2 on pp.55-56 and footnotes 1 and 2 on p.283 of the GT,that Z=wN + P,where w is a fixed,short run money wage,and P is expected economic profit.The latest Cambridge followers of the D Robertson approach are Mark Hayes and Gerhard Michael Ambrosi.It looks like it is going to take a Field prize winner to demonstrate to economists how to do simple integration.

In what chapter does GT include capital theory, the structure of production, time-preferences, and a detailed criticism of FRB?

Re: General Theory Chapter 20 and 21

MatthewWilliam — Mon, 20 Jul 2009 23:32:33 GMT

And it appears it takes a Pulitzer prize winner to answer a simple question.

No-one here is a Cantabrigian, or a member of the Keynesian cult. Take your internal bickering elsewhere.

Re: General Theory Chapter 20 and 21

DD5 — Mon, 20 Jul 2009 23:26:37 GMT

MichaelEmmettBrady:

typical never read the general theory and are mathematically illiterate.

Typical, you don't know anything about economics, and it doesn’t even prove you are mathematically literate. There is nothing in the General Theory that is beyond High school math. Nearly every equation in the General Theory bears absolutely no meaningful relationship to reality.

Keynes was either the biggest fool there was, or the biggest practical joker.

Re: General Theory Chapter 20 and 21

MichaelEmmettBrady — Mon, 20 Jul 2009 23:26:29 GMT

Robertson's mathematical skills were on a par with those of Henry Hazlitt.Both of them would be able to read books that were at the 6th grade pre-algebra level.Keynes wrote the introduction to his D-Z model ,of his theory of effective demand in chapter 3 of the GT, at the pre-algebra level so that the vast majority of 1930's economists would be able to follow what he was doing.Keynes told Robertson point blank that it was a later chapter, titled The Employment Function,that contained his formal,mathematical, technical analysis.This chapter,of course,is chapter 20 of the GT.Robertson could not read this chapter because he was ignorant of calculus.In his original 1955 contribution to the Economic Journal's 1954-56 exchange over the aggregate supply function with Hawtreu and De Jong ,he had to ask Harry Johnson to write a mathematical appendix showing what the functional relationships were in chapter 3 of the GT.Johnson got it wrong right out of the starting gate when he accepted Robertson's claim that Z,the aggregate supply function,equaled pO,where p is the price level and O is output,which is a function of N,total employment.In fact ,it is D=pO,where D is the expected aggregate demand function, and not Z=pO.It is easily proven through simple integration,both in footnote 2 on pp.55-56 and footnotes 1 and 2 on p.283 of the GT,that Z=wN + P,where w is a fixed,short run money wage,and P is expected economic profit.The latest Cambridge followers of the D Robertson approach are Mark Hayes and Gerhard Michael Ambrosi.It looks like it is going to take a Field prize winner to demonstrate to economists how to do simple integration.

Re: General Theory Chapter 20 and 21

MatthewWilliam — Mon, 20 Jul 2009 23:22:25 GMT

In your original post you argue that post Keynesian analysis stems from an error made by a man by Dennis Roberton. What does this have to do with Austrian economics?

Anyone who has studied economics knows the derivation of the Aggregate Supply curve. For a critique of Keynesianism and Hicksian IS-LM analysis, etc., see chapter 18 of Reisman's Capitalism.

Re: General Theory Chapter 20 and 21

Esuric — Mon, 20 Jul 2009 23:13:07 GMT

MichaelEmmettBrady:
typical never read the general theory and are mathematically illiterate.

I bet you didn't know that: XP_nH+P(Price of consumption goods on monday)(aggregated of course)=ICnX REMEMBER IT DEPENDS ON J(jelly beans).

Re: General Theory Chapter 20 and 21

Jon Irenicus — Mon, 20 Jul 2009 23:07:41 GMT

Re-read my post and do as I said.