Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Yes, certainly. In a model in which real factors abstracting from financial considerations determine a level of full employment output to which the economy inevitably gravitates, the act of not consuming out of income frees up resources for other uses.

Its just that that gravitation toward full employment is not based on any empirical cause and effect explanation, its based on the way the model needs to be built to use the traditional analytical toolkit.

So, yes, non-empirical mainstream economics certainly is just a series of Just So stories. If we want empirical economics, we have to abandon the idea of making the re-use of a particular analytical toolkit the defining feature of mainstream economics, and replace it with an effort to provide cause and effect explanations about the material provisioning of society.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Wed Jun 9th, 2010 at 11:11:13 PM EST
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