That was a very useful exercise since it helped me identify the key point of disagreement between you an Keynesianism. If I'm right, you're coming at this from a goods market perspective i.e. "I, a typical consumer am not interested in any of these goods at these prices, so I'm going to not buy so much", whereas the Keynesians are blaming this kind of attitude: "I, a typical consumer am fearful of the future. While I want to buy stuff, I'd better start saving for the future instead in case I lose my job" and it's the saving that triggers the recession (money flows out of the economy into savings, this fools people into thinking they are poorer and the death spiral begins).
It's still not clear to me that you've done what I asked (taboo your model's predicates down to fundamentals laypeople care about), or that you have the understanding that would result from having done what I asked.
What's the difference between the "goods market" perspective and the "blaming this kind of attitude"/Keynesian perspective? Why is one wrong or less helpful, and what problems would result from using it?
Why is it bad for people to believe they are poorer when they are in fact poorer?
Why is it bad for more money to go into savings? Why does "the economy" entirely hinge on money not doing this?
Until you can answer (or avoid assuming away) those problems, it's not clear to me that your understanding is fully grounded in what we actually care about when we talk about a "good economy", and so you're making the same oversights I mentioned before.
you're making the same oversights I mentioned before.
No, I'm not making those oversights because I am a) not a Keynesian and b) not a macroeconomist. My offering defences of this position should not be construed as fundamental agreement that position.
This is quickly turning into a debate about the merits of Keynesianism which is not a debate I am interested in because stabilisation policy is not my field and I don't find it very interesting, I got enough of it at university. I'm going to touch on a few points here, but I'm not going to engage fully wi...
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