T. Windsor Fields

Theoretical Inconsistencies in the ADAS Model: Can the Model be Rehabilitated?

The aggregate demand and aggregate supply model is the dominant pedagogical device in virtually all intermediate macroeconomic textbooks. Central to this textbook model is the conventional aggregate demand (AD) curve derived from the ISLM framework. Price-induced changes in the real money supply shift the LM curve along an unchanging IS curve (absent a real balance effect) and map out levels of output at which aggregate demand and real output are equal. The resulting AD curve is then paired with an aggregate supply (AS) curve, derived from the labour market and a production function, to determine the equilibrium price level and rate of output.1

An Exposition of Fischer's Model of Overlapping Contracts

This article provides a graphical method for incorporating Stanley Fischers model of overlapping contracts into the contract-wage model of aggregate supply.