MAC05 Unemployment

This lecture provided a recap of the Simple Model Discussed in the previous lecture. Video Lecture linked below (in urdu) explained the basic puzzle that was faced by Keynes: How can we explain unemployment? The lecture shows how the simple model allows us to understand Keynesian Unemployment.

For the next class on Monday -- the following assignments are to be done: (TO BE LISTED). One of the assignments is to READ Chapter 3 on Effective Demand. However, this is a very difficult read, and a huge number of different interpretations have been given of this chapter. NOTES on how to understand Keynes, using the simple model, are being written up, and will be provided, and uploaded, shortly. Other assignments will also be put on this page.

Tasks to do be Monday

1. Some students have been assigned to writeup 5 minute portions of the lecture on You-Tube, https://youtu.be/MlVYSUlcYEY -- translate into Engish if necessary and write on shared document below. This will create a transcript of the lecture and notes for a textbook for use for next time.

2. Some other students have been assigned to edit/correct the automatic voice to writeup produced by google for the previous lecture --

3. If you have not done so already, go through the post on Models and Reality -- watch the video lecture on AM20b on Models and Reality which is linked within this post.

4. Read the Post on Kant's Blunder, which explains why ridiculous models are currently in use in economics.

5. A document explaining the concept of Effective Demand is under preparation and will be uploaded soon. This will be the main text for the lecture on Monday. The lecture is about the concept of Effective Demand as explained in Chapter 3 of Keynes -- However Keynes is very difficult to read and understand, so INSTEAD, two readings explaining the concept of Effective Demand are given below. Read these INSTEAD of Keynes

6. Keynes Concept of Effective Demand (Nikita Dutta)

7. The Principle of Effective Demand and Employment Determination (Deepali Pal)

The Video Lecture (in urdu) is linked here. A transcript of what was said -- TRANSLATED into English is also attached below.

Final Exam Question: Consider an economy where there are 10 Landlords and each LL has 5 Acres of Land. There are 40 Laborers and One Laborer working on One Acre of Land can produce 100 Units of Corn. Obviously each LL can hire 4 laborers and produce 400 units of corn. Some portion of this can be paid as wages to the laborers while another portion can be kept as profits for the landlords. EXPLAIN how there can be unemployment in such an economy? Since there are 50 acres of land and only 40 laborers, there is always land available for every laborer to work on. By working, the laborer can produce enough corn to pay his own wages and also produce profit for the landlord -- they WHY would laborer remain unemployed?

Urdu: Understanding Keynesian Unemployment via Simple Model - 85m Video Lecture on YouTube