[lbo-talk] Re: wotsit madder

Doug Henwood dhenwood at panix.com
Fri Mar 5 15:35:47 PST 2004


Bill Bartlett wrote:


>I doubt it makes the mechanics of the economy any clearer to refer
>to supply as "effective demand".

It makes a very important point for Keynes: the level of demand in an economy is determined by the investment and hiring decisions of businesspeople, and their decisions are based on expected profit. The word "expected" is very important for Keynes - a lot depends on the psychological state of the investing class. Supply siders like to claim that JMK didn't care about the supply side, which is very wrong.

Doug



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