KEYNESIAN MACROECONOMICS IN FIVE GRAPHS WITH ONE PAGE OF REFUTATIONS ( by Antony P. Mueller)

03/03/2013

keyIn this spectacular article my colleague Antony Mueller, Professor of the Federal University of Sergipe, masterfully summarized in five simple graphics and only six pages the essence of Keynesian macroeconomics: the "cross diagram", the determination of national income, the inflationary and deflationary "gaps", the "multiplier", and the IS / LM model. At the end of the text he refutes the Keynesian model in a table well prepared. It is necessary to state that a very deep knowledge is required to summarize in just five graphs the essence of Keynes's thought. Professor Mueller really did it.

This article also shows clearly how successive generations of economists have been trained in universities learning a theory that is not compatible with the real world.


I will recommend it to my students as a required reading in my courses.

Antony "In a closed economy without government, aggregate demand (AD) is composed by consumption (C) and investment (I). The consumption function is formed by autonomous consumption (Ca), which is independent of national income (Y), and a part which depends on national income in accordance with the marginal propensity to consume (c). Macroeconomic equilibrium (E) is at the point where aggregate demand (AD) is equal to national income (Y)".

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