All the reasons to reject the AS-AD model

11 September 2025, Version 1
This content is an early or alternative research output and has not been peer-reviewed by Cambridge University Press at the time of posting.

Abstract

The rise of the AS-AD (Aggregate Supply – Aggregate Demand) macroeconomic model in recent decades in academic teaching and economic policymakers suggests that the model in question has undergone extensive testing before being accepted as an untouchable «totem». Instead, we are surprised to note that this is not the case at all, revealing in the AS-AD macroeconomic model conceptual errors, anachronisms that place it in open conflict with capitalist reality, silences intended to hide the truth from operators, and a stubbornness in insisting on economic policies that cannot achieve the desired effects because the operating environment is different from the one hypothesized. As can be seen, our opposition to the AS-AD macroeconomic model is not to contradict the liberal ideology that permeates it, some authors have done in the past to serve their anti-liberal ideology (E. Brancaccio, 2021), but rather to objectively unavoidable arguments that we are keen to explain in the remainder of this discussion.

Keywords

unemployment
inflation
AS-AD model
productivity.

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