L3 Supply & Demand
We will explore why the supply and demand model fails.
Lecture 3 of Advanced Microeconomics II at PIDE on 27th Feb 2017 -- Explains the failure of Supply and Demand in the Labor Market, as originally discovered by Keynes.
Summary of Lecture, with links to related reading, and to YouTube Video, on WEA Pedagogy Blog.
1hr 28m Video Lecture: Failure of Supply and Demand in the Labor Market
SUMMARY (2500 Words) of Lecture
Classical Theory of Supply and Demand
Empirical Evidence Against Classical Theory
Reasons why Classical Theory continues to dominate, despite strong empirical evidence against it.
The Impact of Keynes - Real world impact of Keynesian Theories
Re-Reading Keynes - Read Lessons 7,8,9 which deal with material discussed in this lecture.
Outline of Lecture: Fundamental Flaws in S&D model of Labor Market - expanded outline on WEA Pedagogy Blog
Ideological Macroeconomics and Increasing Inequality - Explains how macro is based on ideology instead of science, and how this leads to increasing inequalities
How Did Economists Get it So Wrong? - Krugman says Robert Lucas turned Great Depression into Great Vacation.
Efficiency Wage Hypothesis: The Case of Pakistan - Syed Kanwar Abbas & Asad Zaman -- Winter 2005
Deification of Science - Read FIRST FOUR links, which explain the methological problem with modern economic theory
Cooter Rappoport - Replacement of Cardinal Utility by Ordinal Utility and of Material Welfare by Scarcity does not represent scientific progress
Card Interview & Relevant Materials - How Supply & Demand is sacred ideology in economics.