I'm trying something a little different here. Think of this as a response to one of the commenters on my last post. This is a very preliminary version of a paper I'm writing. This is my attempt to understand Keynesian economics. The departure point is this post.
I essentially took Farmer's idea, simplified it so that I could understand what he is doing, and then expanded on it, in part by incorporating monetary exchange. I have some ideas about what it all means, but have not quite settled on how I want to write it or what else I might want to include.
This is what I think is the basic Keynesian idea, with no funny business involved. There's suboptimality, and fiscal and monetary policy can correct it. Then you have to ask whether you buy the story or not. Let me know what you think.
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