Theoretical validity of horizontal and intermediate segments of AS Curve in AD-AS model
Valeriy Petukhov
(about the author)
Petukhov Valeriy A. – Candidate of Science, Economics, Teaching Assistant of the Chair of Economic Theory (Financial University under the Government of the Russian Federation)
Keywords:AD-AS model, horizontal and intermediate segments of AS curve, inflation tax, IS-LM model, nominal and real profit
Citation: Valeriy Petukhov (2015). Theoretical validity of horizontal and intermediate segments of AS Curve in AD-AS model. Russian Journal of Entrepreneurship, 16(21), 3735-3742. doi: 10.18334/rp.16.21.2026
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Abstract:
Through numeral examples, the author shows that, due to the inflation tax imposed on entrepreneurs at growing prices, there are serious doubts about the existence of an upward segment of AS curve in AD–AS model. He also produces arguments that the horizontal segment of this model may not exist. This article may be of interest to the specialists in the area of macro-economy who work in the sphere of short-term economic activity fluctuations.