Saturday, June 8, 2013

Issues with Aggregate Supply - Aggregate Demand in Econ Blogs

Mark Thoma, in the blog Economist's View, collects the posts from different blogs about why the Aggregate Supply-Aggregate Demand (AS-AD) is not used by Economics Bloggers - and  confronts the issue of why if economists don't use it in discussions, they why is it taught to students.  Economists use complex Dynamic Stochastic General Equilibrium (DSGE) models in analysis.  But these models are too complex to introduce to students.  So, the debated point is whether it is a useful model to teaching students how to "think like economists" or if it is just a "place holder" until students get to high level courses.

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