• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

Ayn Rand resurgence

:lol:

One is normally enough on a forum. For such a small point as his helicopter metaphor representing an inability or unwillingness to use more realistic assumptions I think it will do. In an essay of 2000 words I'd use about ten and this being about a 100 I think two will do. And two is several in my book.

Considering the implications that you have derived from the point, I would actually counter that 2 references is insufficient. But since you seem to think what is necessary to establish a strong argument then I suppose we should all just agree with your subjective notions. It seems that you have a direct link to Burke, and us non-Burkians are mere mortals in your realm, thus you know better....

Fine be me, but don't expect other posters to give any credence to your fine observations that Austrians are ludicrous or that neo-liberal economics is based on flawed assumptions; when in reality all you are going to do is post sources from one or two books...... At the very least you could engage in some more complex economic arguments, like Onion Eater......
 
Last edited:
Considering the implications that you have derived from the point, I would actually counter that 2 references is insufficient.
What implications? He uses dodgy assumptions sometimes that is all. That is all I said, it is simply that some people who seem to worship him jumped on that as if it could never be allowed to pass and I got bored to death with pointless ramblings about empirical analysis that barely made sense.

But since you seem to think what is necessary to establish a strong argument then I suppose we should all just agree with your subjective notions. It seems that you have a direct link to Burke, and us non-Burkians are mere mortals in your realm, thus you know better....
It seems to me that you don't like what I'm saying and are trying to hold me to impossible standards, two ****ing sources for a small point- how many times do you seem others on this board doing such, so as to be able to dismiss my argument.



when in reality all you are going to do is post sources from one or two books.....
As opposed to other posters here, including yourself, who to my knowledge rarely use two sources for such points. One link at best is normal.

At the very least you could engage in some more complex economic arguments, like Onion Eater......
Are you serious? His posts are border line troll, he turns up every now and gain to bore everyone with his pointless threads. His arguments are hardly complex, they're just wrapped up in a way that makes it look so. Often they're just rants about the post-autistic economists being socialists or something.

I think at the very least you could start making some actual arguments instead of sniping at me and holding me to far higher standards than other posters because I have disagreed with you and you haven't been able to debunk me.
 
Last edited:
Fine be me, but don't expect other posters to give any credence to your fine observations that Austrians are ludicrous
When did I say this?

or that neo-liberal economics is based on flawed assumptions;
Of come on, that was just an off-hand comment aimed at SRFLN's offhand comment about how wonderful neoclassical economics is.
 
What implications? He uses dodgy assumptions sometimes that is all. That is all I said, it is simply that some people who seem to worship him jumped on that as if it could never be allowed to pass and I got bored to death with pointless ramblings about empirical analysis that barely made sense.

It seems to me that you don't like what I'm saying and are trying to hold me to impossible standards, two ****ing sources for a small point- how many times do you seem others on this board doing such, so as to be able to dismiss my argument.




As opposed to other posters here, including yourself, who never to my knowledge rarely use two sources for such points. One link at best is normal.

Are you serious? He posts are border line troll, he turns up every now and gain to bore everyone with his pointless threads. His arguments are hardly complex, they're just wrapped up in a way that makes it look so. Often they're just rants about the post-autistic economists being socialists or something.

I think at the very least you could start making some actual arguments instead of sniping at me and holding me to far higher standards than other posters because I have disagreed with you and you haven't been able to debunk me.

Actually I am holding you to higher standards because of your extreme confidence in your arguments. When a poster is so obviously dismissive of certain economists, people would naturally expect some sort of systematic backing of such claims. You can't have it both ways, arrogantly dismissing certain economists but failing to back it up with substantive evidence, and then covering your arse by saying what is normal when it comes to posting on forums.

Secondly I am very open to your points, I even read the online links that you posted, I am intriqued at the very least, and for that matter believe the Nicholas Kaldor raises doubts about monetarism. But if I am to some how grasp you broad dismissals of monetarism it would be nice to seem some real concrete evidence that backs up your claims.

Therefore my issue is not with the actual material that you have presented, but rather the disconnect between your broad claims and the lack of substantial evidence to back such claims up.

The reason I am 'snipping' is that for some reason you can be very dismissive of ideas, yet you fail to provide real grit to back up your self-assurance. Now maybe you know a lot more than me and other posters, but this style of posting lacks humility and certainly lacks real substance.

Thirdly, if you understand the nature of debating, I don't have to post any actual arguments in this forum, as I have never claimed the Milton's theorems were correct nor have I stated that they were flawed. If anything I have been critical of the methodology that you have employed to back up your very strongly worded dismissal of monetarism. There is a clear difference.
 
Last edited:
Actually I am holding you to higher standards because of your extreme confidence in your arguments. When a poster is so obviously dismissive of certain economists, people would naturally expect some sort of systematic backing of such claims. You can't have it both ways, arrogantly dismissing certain economists but failing to back it up with substantive evidence, and then covering your arse by saying what is normal when it comes to posting on forums.
Arrogantly? I attacked one part of his ideas and provided two sources for it. By any message board etiquette that is fine.
Secondly I am very open to your points, I even read the online links that you posted, I am intriqued at the very least, and for that matter believe the Nicholas Kaldor raises doubts about monetarism. But if I am to some how grasp you broad dismissals of monetarism it would be nice to seem some real concrete evidence that backs up your claims.
I don't remember making broad dismissals as part of a proper argument, I could but I really can't be bothered to back it up and argue it out in detail, so I simply made a small critique.


The reason I am 'snipping' is that for some reason you can be very dismissive of ideas, yet you fail to provide real grit to back up your self-assurance. Now maybe you know a lot more than me and other posters, but this style of posting lacks humility and certainly lacks real substance.
The detailed claims I made I backed up. Anything else was heat of the moment off-hand come back to off-hand remarks made by SRFLN.

Thirdly, if you understand the nature of debating, I don't have to post any actual arguments in this forum, as I have never claimed the Milton's theorems were correct nor have I stated that they were flawed. If anything I have been critical of the methodology that you have employed to back up your very strongly worded dismissal of monetarism. There is a clear difference.
Strongly worded? Maybe I was but I can't remember much. The most I remember saying was that it had a negative effect in England. This is well known. What you have done is simply snipe because you want to attack me, because I have disagreed with you before and you have been unable to debunk it.
 
Last edited:
Arrogantly? I attacked one part of his ideas and provided two sources for it. By any message board etiquette that is fine.
I don't remember making broad dismissals as part of a proper argument, I could but I really can't be bothered to back it up and argue it out in detail, so I simply made a small critique.


The detailed claims I made I backed up. Anything else was heat of the moment off-hand come back to off-hand remarks made by SRFLN.

Strongly worded? Maybe I was but I can't remember much. What you have done is simply snipe because you want to attack me, because I have disagreed with you before and you have been unable to debunk it.

I am not trying to debunk your argument. And for the record which argument do you think that I am trying to debunk?

What I am critical of is your strong assertions that are not substantively backed. If anything I am being skeptical of your assertions, that is all.

Lastly I may have described your assertions at times as arrogant, but it is nothing personal. Do I dislike you as a poster? Certainly no. Am I somehow out to get you because we have disagreed in other threads? Absolutely no. I enjoy a bit of verbal sparring, and for the record you have enlightened me in regards to Burkian-conservatism and de-centralist-libertarianism. But what I do have a problem with is your strongly worded dismal of an aspect of Milton Friedman's ideas without providing more substantial arguments. Maybe that is some of science background showing through....
 
I am not trying to debunk your argument. And for the record which argument do you think that I am trying to debunk?

What I am critical of is your strong assertions that are not substantively backed. If anything I am being skeptical of your assertions, that is all.

Lastly I may have described your assertions at times as arrogant, but it is nothing personal. Do I dislike you as a poster? Certainly no. Am I somehow out to get you because we have disagreed in other threads? Absolutely no. I enjoy a bit of verbal sparring, and for the record you have enlightened me in regards to Burkian-conservatism and de-centralist-libertarianism. But what I do have a problem with is your strongly worded dismal of an aspect of Milton Friedman's ideas without providing more substantial arguments. Maybe that is some of science background showing through....
Except of course I provided more argument and back up than most posters do for far more detailed and wider arguments. Even you admitted this but apparently I'm arrogant so I need even more sources.:confused:

Anyway this is going nowhere how about we rap it up.
 
Except of course I provided more argument and back up than most posters do for far more detailed and wider arguments. Even you admitted this but apparently I'm arrogant so I need even more sources.:confused:

Anyway this is going nowhere how about we rap it up.

Yes I have admitted that you have provided sources, that is not in question. But rather whether the sources sufficiently back up your strong assertion.
 
Yes I have admitted that you have provided sources, that is not in question. But rather whether the sources sufficiently back up your strong assertion.

By strong assertion you mean the small critique of a small part of Friedman's argument, particularly his use of some unrealistic assumptions.

I could make a larger critique but I'm very lazy.;)
 
By strong assertion you mean the small critique of a small part of Friedman's argument, particularly his use of some unrealistic assumptions.

I could make a larger critique but I'm very lazy.;)

Yes good sir, I mean your very small but strongly worded critique of "Milton Freedman's flawed assumptions". :mrgreen:
 
Yes good sir, I mean your very small but strongly worded critique of "Milton Freedman's flawed assumptions". :mrgreen:

Well I didn't know strong words required more sources.:2razz:

Anyway I don't have a particularly good opinion of Milton Friedman, I have read his Capitalism and Freedom and it seemed to me to simply be applying neoclassical economics to society, it lacked what I felt was the insight and depth in Hayek's The Constitution of liberty.

But that is just my opinion, I'm too lazy to do a detailed critique of Friedman.
 
Last edited:
Some appromixation of reality I'd say. The thing is that models which can make some predictions but with dodgy assumptions are very bad for policy, it is hard to tell casuality and to proceed in the right direction.
The people who claim to have "reasonable" assumptions tend to be of the variety that write excellent works like The Great Crash or spend their time arguing economics as though it were still the early 20th century (or vote for Ron Paul). In all honesty, it's impossible to explain something as systematic, and varied as an economy without first looking through the numbers. The way individuals learn to look through the numbers is through teaching; teaching happens through communication, and communication is generally facilitated by words.

Of course you can use an economists writings as proof, it simply means one has to read what that economist said and hwo they came to that conclusion.
It was not a "non-empirical" study, in fact it is based around the Radcliffe report and other empirical data.
This is what I was getting at earlier. How an author came to their conclusions, and whether or not one finds the conclusions reasonable is dependent on numerous factors. (Some of these factors are) 1. Did the individual comprehend the work (a good starting point). 2. Did the reader understand how the writer was using certain words, and 3. Does the author start from a point that guarantees a certain conclusion (which is very often the case). All of those factors have lead to incalculable journal articles in literature trying to figure out what authors have said. Presumably in economics we are saved such a process because the writing is rather "rational." However, individuals are not rational, and they cannot be very well described by words either. I've tried to say this before, but I don't think it was entirely clear, words are by nature somewhat comparative, and ultimately finite. Humans, for all intents and purposes (meaning, if we want to take reality "real") are subject to quite a few biological processes. We are in essence creatures of emotion/biology. However, that shared biology tends to lead to some notable trends in the ways human's behave. This may account for history repeating itself on so many occasions. Words were generally ,created for the purposes of communication (I think this exact idea came from Rousseau's tract on Inequality, which I really cannot recall the name of). If you wish to describe reality you need an infinite description tool.
Can the framework reason provides be said to explain what actual evidence tells us? Can't a framework also tell one what to look for in data?
I'm not interested in post-modernist idiocy. Let's leave aside the post-modernism because I really can' see how it helps your argument, in fact it tends to weaken it if you buy the rubbish that is.
This sounds like a mighty strong argument against it. I wasn't saying you should take all of the **** that came out of pomo analysis. You should take the the most significant points of the analysis and apply it. I think most people (doing real economic research) would regard what you likely spend your time reading as exceptionally dated (just like many people now say they are "over" post-modernism). I had a feeling you wanted more to participate in a book discussion more than you did in a casual debate. I don't plan on making all of my comments entirely philosophically consistent, and as a result I also try not to nit-pick your points because that leads to moronic wikipedia binges rather than anything worth reading.


You seem to jump between extreme subjectivism and objectivism with breathtaking speed. I can only conclude you don't knoiw what you are talking about or this is some kind of strange debating technique.
It's almost as though Ayn and Albert have been fornicating in my id.
I can only conclude that you might be better served asking questions rather than simply rushing to your conclusions. Again, if you want to talk to experts on this your professors are a fine source. Again, this is a website with ads like "which liberal said I'm having a good crisis" suffice it to say I'm not going to be writing journal articles for posts.

The post-modernists made their points, they have far from triumped even if they added something to the the inllectual debate, as my lecturer from the US said, Post-modernism is rather over in the US, it has been largely displaced and everyone has moved on.
Using your standard for "post-modernism" being mostly over, I think we could say the same thing about the mode of economic analysis you so strongly champion; most economists do not spend their time actively questioning normative issues, instead they may prove some of the inefficient aspects of markets (see Joseph Stiglitz, and other works by neuro-economists), but they add to the field because there ideas don't have to be rational. You can test them again, and again, to the changing circumstances of the world. To the point, models must be explained by words, and sometimes the words point us to other directions, but tying our
 
God, it goes on and on.
Me and AL had the debate we were supposed to have. I don't see the necessity in this rambling stuff.
As I told you earlier, I thought this debate would not persuade you of any of my points. I think its sufficient to say that I was correct in this regard. You may dismiss the points as "ramblings," but you would be better served by simply asking questions if I'm being incoherent (in essence, you won't find out what people are arguing if you don't ask questions). I do apologize though if any of this comes off too strongly.
 
Here's some "evidence" to point at what Keynesians (probably the only school of thought that has some basis in reality in your view) actually think. I want to remind you that none of this really points to what you say (jee whiz, even the guys you might like think your mode of analysis is bollocks). Notice how Keynesians have used models to prove their points in relation to some of the fluctuation in a capitalist economy. Keynesian Economics: The Concise Encyclopedia of Economics | Library of Economics and Liberty . (Written by by Alan Blinder, mostly regarded as closer to a technician). (Notice also that Friedman worked with Keynesians, and other Keynesians provided empirical backing to his claims on stagflation.) In essence, most of your points on Friedman seem to be incredibly biased towards a methodology which is dated like Euclidean Geometry. (This is perhaps why the number of journal articles written like you write have substantially decreased over the years, just applying your post-modernism in general terms is bunk because everybody says it is).
 
Last edited:
What mode of analysis? Your not making sense. Even AL seemed to agree your attachment to empirical evidence while somehow believing you can make sense of it without analysis is silly.

I made small claim and backed it up with two sources, much more than generally happens on these sites, and now I'm inundated with all this nonsense.

You can continue to talk to yourself about my "mode of analysis" if you wish but don't expect much of a reply. Be sure to tell when you've desired on all the details of it for me won't you.:2wave:

Oh and Goldenboy, shame on you for thanking nonsense.
 
What mode of analysis? Your not making sense. Even AL seemed to agree your attachment to empirical evidence while somehow believing you can make sense of it without analysis is silly.

I made small claim and backed it up with two sources, much more than generally happens on these sites, and now I'm inundated with all this nonsense.

You can continue to talk to yourself about my "mode of analysis" if you wish but don't expect much of a reply. Be sure to tell when you've desired on all the details of it for me won't you.:2wave:

Oh and Goldenboy, shame on you for thanking nonsense.
Nonsense is stating,
"I only claimed he was wrong about unrealistic assumptions, particularly the helicopter thing. That doesn't need "empirical evidence" unless you are asking for proof the gov't doesn't drop money by helicopter.
And then I read wikipedia.
Wikipedia said:
Milton Friedman suggested that a monetary authority can escape a liquidity trap by bypassing financial intermediaries to give money directly to consumers or businesses. This is referred to as a money gift or as helicopter money. The term helicopter money is meant to portray the image of a central banker dropping money on people from a helicopter. Political considerations make it difficult for a monetary authority to grant the money gift, because individuals and firms not receiving free money will exert political pressure.
So are you just talking about economics from a policy perspective (when you say there needs to be more analysis)? If so that would clarify a great many things (I would agree with some aspects after reading a little bit of The Scourge of Monetarism. Friedman did have difficulties in properly crafting his policy, although that's partially due to inherent limitations in crafting "perfect" monetary policy.) If any of the above, is not the case I think you might have slightly oversimplified that helicopter analogy slightly.
 
What are you talking about?

That simpl
y proves my point. It is unrealistic. How many central bankers do that.:doh

Nonsense are your posts.
I think you're taking the analogy too seriously.
WIKIPEDIA said:
"Milton Friedman suggested that a monetary authority can escape a liquidity trap by bypassing financial intermediaries to give money directly to consumers or businesses. This is referred to as a money gift or as helicopter money.
The helicopter is just an analogy, it's like Friedman actually wanted to the Fed to start buying helicopters. The real point is that it would "drop money" in a way that wouldn't be overly obvious. I'm not saying it's done often, but you made it out to be a literal instance of the government dropping money as unrealistic.
 
Aside from the supreme irony of your rants about my evidence when you rely on wikipedia the point is that in his theory, according to these people he still had to use the helicopter metaphor rather than showing how the gov't would go about doing this.
 
Aside from the supreme irony of your rants about my evidence when you rely on wikipedia the point is that in his theory, according to these people he still had to use the helicopter metaphor rather than showing how the gov't would go about doing this.
Here's a real time example.

ECB’s Stark: IMF Boost Is ‘Helicopter Money’ - Real Time Economics - WSJ
Wall Street Journal said:
U.S. economist Milton Friedman formed the term “helicopter money,” portraying the image of a central banker dropping cash from a helicopter to stimulate the economy. Federal Reserve Chairman Ben Bernanke picked up on the idea in 2002, when he was a Fed governor, suggesting that a central bank could prevent deflation, or a period of sustained price declines, by issuing more money.
As I said, it is meant as an analogy.
 
Here's a real time example.

ECB’s Stark: IMF Boost Is ‘Helicopter Money’ - Real Time Economics - WSJ

As I said, it is meant as an analogy.

Obviously and it is unrealistic. What is your point?

And actually it is far from as restricted as you make it sound, it was an important use for a theory not something just a tangential illustration.

http://ricardo.ecn.wfu.edu/~cottrell/old_papers/pkme.pdf

Variations in the quantity of money can be important in a post Keynesian
context, but not as ‘prime mover’. When firms wishing to carry out additional
investment expenditure approach the banks for funds, it will make a difference
whether these requests are granted (in which case money supply expands) or not.
But this is far from the sort of exogenous ‘helicopter drop’ which is the starting
point for orthodox discussions of the impact of changes in money stock.


It is used to as a important crutch to study something as important as changes in the general money stock. It has been called his "infamous" money drop scenario for a reason.

Steve Keen’s DebtWatch No 31 February 2009: “The Roving Cavaliers of Credit” | Steve Keen's Debtwatch

Ironically, Milton Friedman argued that money was crucial in his interpretation of the Great Depression—that the failure of the Federal Reserve to sufficiently increase the money supply allowed deflation to occur. But he a trivial “helicopter” model of money creation that saw all money as originating from the operations of the Federal Reserve:

“Let us suppose now that one day a helicopter flies over this community and drops an additional $1,000 in bills from the sky, which is, of course, hastily collected by members of the community. Let us suppose further that everyone is convinced that this is a unique event which will never be repeated… [16]

When the helicopter starts dropping money in a steady stream— or, more generally, when the quantity of money starts unexpectedly to rise more rapidly— it takes time for people to catch on to what is happening. Initially, they let actual balances exceed long— run desired balances…” (p. 13)

and a trivial model of the real economy that argued that it always tended back to equilibrium:

“Let us start with a stationary society in which … (5) The society, though stationary, is not static. Aggregates are constant, but individuals are subject to uncertainty and change. Even the aggregates may change in a stochastic way, provided the mean values do not… Let us suppose that these conditions have been in existence long enough for the society to have reached a state of equilibrium…” (pp. 2-3)

One natural question to ask about this final situation is, “ What raises the price level, if at all points markets are cleared and real magnitudes are stable?” The answer is, “ Because everyone confidently anticipates that prices will rise.” (p. 10)

Using this simplistic analysis, Milton Friedman claimed that inflation was caused by “too many helicopters” and deflation by “too few”, and that the deflation that amplified the downturn in the 1930s could have been prevented if only the Fed had sent more helicopters into the fray:

“different and feasible actions by the monetary authorities could have prevented the decline in the money stock—indeed, produced almost any desired increase in the money stock. The same actions would also have eased the banking difficulties appreciably. Prevention or moderation of the decline in the stock of money, let alone the substitution of monetary expansion, would have reduced the contraction’s severity and almost as certainly its duration.” [17]


Clearly it is not some trivial analogy and Kaldor, who unlike the wikipedia editors was a world class economist himself, was relatively accurate, he was attacking something of some substance in Friedman's work and not on this random, trivial tangent as you seem to be suggesting.
 
Last edited:
Obviously and it is unrealistic. What is your point?

And actually it is far from as restricted as you make it sound, it was an important use for a theory not something just a tangential illustration.

http://ricardo.ecn.wfu.edu/~cottrell/old_papers/pkme.pdf

Variations in the quantity of money can be important in a post Keynesian
context, but not as ‘prime mover’. When firms wishing to carry out additional
investment expenditure approach the banks for funds, it will make a difference
whether these requests are granted (in which case money supply expands) or not.
But this is far from the sort of exogenous ‘helicopter drop’ which is the starting
point for orthodox discussions of the impact of changes in money stock.


It is used to as a important crutch to study something as important as changes in the general money stock. It has been called his "infamous" money drop scenario for a reason.

Steve Keen’s DebtWatch No 31 February 2009: “The Roving Cavaliers of Credit” | Steve Keen's Debtwatch

Ironically, Milton Friedman argued that money was crucial in his interpretation of the Great Depression—that the failure of the Federal Reserve to sufficiently increase the money supply allowed deflation to occur. But he a trivial “helicopter” model of money creation that saw all money as originating from the operations of the Federal Reserve:

“Let us suppose now that one day a helicopter flies over this community and drops an additional $1,000 in bills from the sky, which is, of course, hastily collected by members of the community. Let us suppose further that everyone is convinced that this is a unique event which will never be repeated… [16]

When the helicopter starts dropping money in a steady stream— or, more generally, when the quantity of money starts unexpectedly to rise more rapidly— it takes time for people to catch on to what is happening. Initially, they let actual balances exceed long— run desired balances…” (p. 13)

and a trivial model of the real economy that argued that it always tended back to equilibrium:

“Let us start with a stationary society in which … (5) The society, though stationary, is not static. Aggregates are constant, but individuals are subject to uncertainty and change. Even the aggregates may change in a stochastic way, provided the mean values do not… Let us suppose that these conditions have been in existence long enough for the society to have reached a state of equilibrium…” (pp. 2-3)

One natural question to ask about this final situation is, “ What raises the price level, if at all points markets are cleared and real magnitudes are stable?” The answer is, “ Because everyone confidently anticipates that prices will rise.” (p. 10)

Using this simplistic analysis, Milton Friedman claimed that inflation was caused by “too many helicopters” and deflation by “too few”, and that the deflation that amplified the downturn in the 1930s could have been prevented if only the Fed had sent more helicopters into the fray:

“different and feasible actions by the monetary authorities could have prevented the decline in the money stock—indeed, produced almost any desired increase in the money stock. The same actions would also have eased the banking difficulties appreciably. Prevention or moderation of the decline in the stock of money, let alone the substitution of monetary expansion, would have reduced the contraction’s severity and almost as certainly its duration.” [17]


Clearly it is not some trivial analogy and Kaldor, who unlike the wikipedia editors was a world class economist himself, was relatively accurate, he was attacking something of some substance in Friedman's work and not on this random, trivial tangent as you seem to be suggesting.
Alright, as I said, it was an analogy that setup the explanation of the model. The point was that after a helicopter drop individuals would not further expect an increase in the money supply. Therefore, they would not expect prices to rise. The explanation is not completely intuitive, but it's only a starting point. If the assumptions are too simplistic then someone will find a model that does a better job of explaining the phenomenon. He may not be giving a perfectly nuanced explanation, and in some cases it's better if a model makes simplistic assumptions to test if there is a general trend, and then refine parts of the model from there. However, I think it's a little presumptuous of you to know in what instances one needs to refine simplistic assumptions, or develop them for testing. It may simply be that a broad variety of assumptions (in different capacities) are needed to best explain reality, while advancing the field forward.

But let's be more specific Friedman states,

"When the helicopter starts dropping money in a steady stream— or, more generally, when the quantity of money starts unexpectedly to rise more rapidly— it takes time for people to catch on to what is happening. Initially, they let actual balances exceed long— run desired balances…” (p. 13)."
To some degree the stagflation that happened in the 70's reflects what Friedman is saying. The increase in the money supply is initially unnoticed by individuals (but it does have the effect of bringing certain factors of the economy back in line, in the short-run). The Phillip's curve, was dis-proven (in the long-run) by individuals expecting inflation, and building them into their contracts. This then caused stagflation (something the Phillip's curve did not see as possible). So the assumption (that people take time to adapt to a change in the money supply, and factor that into their decision) does have some explanatory power of reality if you don't take it too directly.
 
Alright, as I said, it was an analogy that setup the explanation of the model. The point was that after a helicopter drop individuals would not further expect an increase in the money supply. Therefore, they would not expect prices to rise. The explanation is not completely intuitive, but it's only a starting point. If the assumptions are too simplistic then someone will find a model that does a better job of explaining the phenomenon. He may not be giving a perfectly nuanced explanation, and in some cases it's better if a model makes simplistic assumptions to test if there is a general trend, and then refine parts of the model from there. However, I think it's a little presumptuous of you to know in what instances one needs to refine simplistic assumptions, or develop them for testing. It may simply be that a broad variety of assumptions (in different capacities) are needed to best explain reality, while advancing the field forward.
Aside from the apologetics inserted here you have accepted my point, although you did not apologise for suggesting I was talking out of context or any of the other crap you have subjected me too in this thread.

May claim was rather simple, there is no need to get into these other discussions about philip's curves and what have you, so let's rap it up.
 
Back
Top Bottom