Neoclassical Demand Theory

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3.2. Neoclassicals say there is no neoclassical supply and demand theory If incidentally neoclassical economics creators had the intention of producing a realistic supply and demand theory of price and production determination, they would have somehow adopted and tried to develop the pioneering Cournot’s work (Cournot, 1838) on maximization. They would have failed, but actually they never had such intention since they must abide by the monetarist dogma imposing that the general price index is determined by the money supply or the interest rate, both falsely assumed to be under control of the central banks. Mainstream monetarist economists cannot admit that prices and production are always determined by demand and supply. Notwithstanding, at…show more content…
Despite that, neoclassical economists are aware of the existence of many kinds of competition that are not perfect. Accordingly, they created a plethora of imperfect competition, game theory and likewise models that do not lead to the supply curve. So, they pretend that outside the perfect competition fantasy world there is no supply curve at all. Therefore neoclassical economists state that there is no general neoclassical supply curve. The conclusion is thus that in accordance with neoclassical economists, there is no neoclassical supply and demand theory. Really, mainstream economics cannot be submitted to the test of reality; so, it is not science and should be dismissed. Mainstream researchers are not constructing hypotheses to be tested; they are stating how the real world people ought to perform to justify their theorems, support their paradigm and transfer income to the few rich. Mainstream economics is a doctrine that prevents itself from being promoted to the status of…show more content…
Unfortunately such works did not considered the possibility of developing a real world non-equilibrating supply and demand theory. Moreover, the rejection of the neoclassical doctrine of supply and demand does not harm the monetary mainstream paradigm. Central banks will keep supporting neoclassical economists by the traditional means (Grim, 2013) for the neoclassical broken doctrine is very much interesting to the monetarist paradigm dominance. Mainstream followers also developed convenient criticism to many economic theoretical findings that do not support or contradict their doctrine. The most important of these findings mainstream must deny seems to be the real world aggregate supply and demand theory, since mainstream economists must convince everybody that there is no involuntary unemployment, the general price level is a monetary concern and monetary policy is a must to fight inflation. A real world supply and demand theory would prevent monetarist mainstream economists from supporting their denial of the fiscal policy and justifying their monetary

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