Elliott waves and Cambridge

[Bradford DeLong]

>  >Of course, there are similar problems in garden-variety >consumer
>>demand theory: Giffen goods, where (over some range) >demand increases
>>as the price rises.
>
>Brad, mate, _give_up_ on this line of defence; it's not even a coherent
>analogy.  There is *no* problem of Giffen goods in consumer demand theory.
>The possible existence of Giffen goods is *predicted* by the standard model
>of consumer demand theory, and there is a perfectly simple way of modelling
>demand for a Giffen good under the standard model.  Giffen goods do *not*
>attack the fundamental mathematical underpinnings of consumer demand theory.

And Christopher Bliss would say that reswitching and other 
curiosities don't attack the mathematical underpinnings of  "X" once 
one recognizes that "X" is not a beast called "capital theory" but is 
instead a beast called "the intertemporal price system."


>No, and if you had your maths head on you'd realise that this can't be
>right.  What the argument is, is that *because of the theoretical
>consistency of those situations*, the claim that lower interest rates
>trigger shifts to more capital-intensive production processes is *always*
>incoherent.
>
>dd

Will you allow me to say that lowering the interest rate is likely to 
raise the number and aggregate total cost of investment projects with 
positive risk-adjusted net present value?

Brad DeLong