>>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.
Yes, expected investment has an important influence on effective demand. But supply is not demand and it irritates me when people distort the meaning of words.
Bill Bartlett Bracknell Tas