A NOTE ON A "KEYNESIAN" MODEL OF AGGREGATE DEMAND.

In his paper "Financial intermediaries, Credit Availability, and Aggregate Demand," Robert Shapiro has presented a "Keynesian" type model with the accent on illustrating the interplay of the bond and money markets. This modal is then extended to handle the case of financial intermediaries--a departure of considerable pedagogical value. In this note an attempt will be made to review and clarify certain concepts in the presentation of Professor Shapiro's basic model of aggregate demand, the point being that his integration of financial intermediaries into the analysis should, if possible, follow from a model free from certain misunderstandings. [ABSTRACT FROM AUTHOR]