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Topic: Keynesian

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  Keynesian economics - Wikipedia, the free encyclopedia
Keynesian economics (pronounced kaynzian) or Keynesianism, is an economic theory based on the ideas of John Maynard Keynes, as put forward in his book The General Theory of Employment, Interest and Money, published in 1936 in response to the Great Depression of the 1930s.
A central conclusion of Keynesian economics is that there is no strong automatic tendency for output and employment to move toward full employment levels.
Keynesian ideas became almost official in social-democratic Europe after the war and in the U.S. in the 1960s.
en.wikipedia.org /wiki/Keynesian   (4050 words)

 Keynesian economics - One Language   (Site not responding. Last check: 2007-11-07)
Keynesian economics, or Keynesianism, is an economic theory based on the ideas of John Maynard Keynes, as put forward in his book The General Theory of Employment, Interest and Money, published in 1936 in response to the Great Depression of the 1930s.
From this he argued that government policies could be used to promote demand at a "macro" level, to fight high unemployment of the sort seen during the 1930s.
The heart of the new Keynesian view rests on microeconomic models that indicate that nominal wages and prices are "sticky," i.e., do not change easily or quicky with changes in supply and demand, so that quantity adjustment prevails.
www.onelang.com /encyclopedia/index.php/Keynesian_economics   (3883 words)

 Keynesian Economics, by Alan S. Blinder: The Concise Encyclopedia of Economics: Library of Economics and Liberty
Keynesian economics is a theory of total spending in the economy (called aggregate demand) and of its effects on output and inflation.
Keynesians do not think that the typical level of unemployment is ideal—partly because unemployment is subject to the caprice of aggregate demand, and partly because they believe that prices adjust only gradually.
Keynesians' belief in aggressive government action to stabilize the economy is based on value judgments and on the beliefs that (a) macroeconomic fluctuations significantly reduce economic well-being, (b) the government is knowledgeable and capable enough to improve upon the free market, and (c) unemployment is a more important problem than inflation.
www.econlib.org /library/Enc/KeynesianEconomics.html   (2440 words)

 Christianity and Economics - The Fall of Keynesian Economics
Keynesian orthodoxy passed from complete domination of the American economics profession in the 1960’s to near irrelevance as Friedman’s revolutionary monetarist theories and empirical research systematically demolished the Keynesian paradigm.
In the Keynesian terminology nominal wages are “sticky,” and employers cannot cut their employee’s wages.[xx] Since wages will not adjust downwards, and businesses must pay their employees the same wages they did when the nation had a much higher income, the economy will stay stuck in a recession if left to its own devices.
Keynesians quickly incorporated the new data into their existing paradigm and provided a theoretical underpinning for Phillips’ observed empirical data.[xxv] The Keynesians held that the employment rate served as a proxy for excess demand in the labor market.
www.evangelsociety.org /sherk/keynes.html   (7348 words)

 The Keynesian Revolution
This chapter examines the major elements of Keynesian economics, identifies some of the differences between Keynesian economics and neoclassical economics, and briefly assesses Keynesian economics both as an economic philosophy and as an economic paradigm.
Keynesian economics starts with an understanding of the limitations of neoclassical economics, which is based on examining only one thing at a time in an economy in which money serves only as a medium of exchange.
Keynesian economics attempts to understand an economy in which everything happens at once and in which money serves as a store of value.
distance-ed.bcc.ctc.edu /econ100/ksttext/keynes/keynes.htm   (6008 words)

Although both Keynesianism and Monetarists accept the same high level of aggregation, one which closes off issues believed by the Austrians to be among the most important, they have sharp disagreements about the nature of the relationships among these macroeconomic aggregates.
Keynesians believe that the interest rate, largely, if not wholly, a monetary phenomenon, is determined by the supply of and demand for money.
Keynesians believe that in conditions of economy-wide unemployment, idle factories, and unsold merchandise, price and wages will not adjust downward to their market-clearing levels—or that they will not adjust quickly enough, or that the market process through which such adjustments are made works perversely as falling prices and falling wages feed on one another.
www.auburn.edu /~garriro/fm2friedman.htm   (7057 words)

 TOPIC 15 — KEYNESIAN MACRO-ECONOMICS   (Site not responding. Last check: 2007-11-07)
In the preceding topic we studied the basic Keynesian model and saw how it was incorporated into a broad system of theory, the "neo-classical synthesis", and a widely accepted approach to economic and social policy known as "the Keynesian consensus".
Keynesians are inclined to the view that this is the kind of equilibrium which developed industrial economies tend to fall into.
Keynesians of varying stripes remain unconvinced while monetarists, new classicals, supply siders, and others argue with varying degrees of conviction that markets are functional and that the economy will tend automatically to find an equilibrium at some level of output consistent with a "natural" rate of unemployment without the help of well-intentioned policy makers.
www.chass.utoronto.ca /~reak/eco100/100_15.htm   (6003 words)

Keynesian myths persist today largely because of the uncritical presumption that the economy's sluggishness and instability are to be attributed to fundamental defects in the market system rather than to the perversities of the very policies intended to compensate for those supposed defects.
To be consistent with the basic Keynesian vision, an increase in income of, say, ten percent must imply an increase in the employment of labor of ten percent plus corresponding increases in the employment of both land and capital.
Keynesian Splenetics, which is based on my own reading of Keynes as guided by Meltzer's "different" interpretation, portrays the General Theory as a lopsided exercise in comparative institutions, one in which Keynes compares capitalism-as-it-is with socialism-as-it-has-never-been.
www.auburn.edu /~garriro/fk1hdale.htm   (8217 words)

The "Neoclassical-Keynesian Synthesis" refers to the Keynesian Revolution as interpreted and formalized by a largely American group of economists in the early post-war period.
Abba Lerner (1944, 1951) was among the first to recognize the implications of the Keynesian system for government macroeconomic policy: by appropriate fiscal and monetary policies, a government could "steer" the economy away from extremes and thus smooth out the business cycle.
The Cambridge Keynesians and their counterparts in the United States (the American Post Keynesians), considered the Neo-Keynesian construction as a horrendous betrayal of the Keynesian Revolution.
cepa.newschool.edu /het/schools/synthesis.htm   (994 words)

 New Keynesian Economics, by N. Gregory Mankiw: The Concise Encyclopedia of Economics: Library of Economics and Liberty
New Keynesian economics is the school of thought in modern macroeconomics that evolved from the ideas of John Maynard Keynes.
The label "new Keynesian" describes those economists who, in the eighties, responded to this new classical critique with adjustments to the original Keynesian tenets.
Because new Keynesian economics is a school of thought regarding macroeconomic theory, its adherents do not necessarily share a single view about economic policy.
www.econlib.org /library/Enc/NewKeynesianEconomics.html   (2096 words)

 CEF 1997: Agent-Based Keynesian Economics; Methodological Issues and a Model   (Site not responding. Last check: 2007-11-07)
The present approach has, however, been named "agent-based Keynesian economics" in order to underline the fact that agent-based computational economics is an approach with a methodology in common, but without a specific approach to economics in common.
In the seventies Keynesian theory was rejected by the mainstream because of its lack of microfoundation; it appeared to be impossible to reach Keynesian conclusions from the study of individual rational agents1.
It seems important to reconsider the work of Keynes himself with this possibility in mind rather than attempting to revive the "keynesian theory" that was rejected, since the methodological starting point of Keynes appear to be fundamentally different from that of the so-called "keynesians".
bucky.stanford.edu /cef97/abstracts/bruun.html   (440 words)

 Economics Interactive
The Keynesian beauty contest is the view that much of investment is driven by expectations about what other investors think, rather than expectations about the fundamental profitability of a particular investment.
The Keynesian structuralist approach to Phillips curves hypothesizes that as unemployment falls and full employment is approached, it becomes increasingly costly to produce extra output; and emphasizes production bottlenecks as foundations for the Phillips curve.
Traditional Keynesians subscribe to a school of thought that favors macroeconomic stabilization and management of aggregate demand by government through changes to federal spending and tax policies.
www.unc.edu /depts/econ/byrns_web/Economicae/EconomicaeK.htm   (1020 words)

 Eastern Economic Journal: impossibility of involuntary unemployment in new Keynesian efficiency wage models, The
Keynesian economists who are not New Keynesians have also criticized these models.
New Keynesians base the importance of wage rigidity, in part, on Keynes's rejection of the "second postulate" of Classical economic theory; only labor demand, not labor supply, plays a role in determining wages [Keynes, 1936, 10-13].
Thus, the ability of New Keynesians to explain involuntary unemployment with neoclassical microfoundations seems to collapse to contending that competition is not sufficient to keep firms from unjustly dismissing workers.
www.findarticles.com /p/articles/mi_qa3620/is_199407/ai_n8711557   (1285 words)

 Keynesian   (Site not responding. Last check: 2007-11-07)
Monetarist claim that banking panics was a cause of the depression and Keynesian see them as a result of the depression.
Both the Monetarist and Keynesian’s give different reasons for the extent of the Depression and emphasize different parts of the international decline.
Keynesian economics suggest the use of government intervention (expansionary fiscal policy) in times of necessity and this was clearly one of those times.
www.dickinson.edu /~bissingh/Keynesian.htm   (1832 words)

 Milton Friedman, Ex-Keynesian
In his autobiography, Friedman says he was "cured" of Keynesian thinking "shortly after the end of the war," but doesn't elaborate.
Friedman is known as the leader of the Monetarist opposition to the Keynesian revolution.
And, as early as 1963, he labeled as "erroneous" the Keynesian proposition that the free-market economy can be stuck indefinitely at less than full employment.
www.mskousen.com /Books/Articles/exkeynes.html   (982 words)

 New Keynesian Models and Their Fit to the Data (2004-17, 07/09/2004)
New Keynesian models are notable for using microeconomic principles to describe the behavior of households and firms, while allowing price and/or wage rigidities and inefficient market outcomes.
These "hybrid" New Keynesian models, as they are known, are important because they are rapidly becoming the workhorse models in academic studies of monetary policy.
Hybrid New Keynesian models are widely used to explore monetary policy issues and to identify and study the sources and importance of macroeconomic fluctuations.
www.frbsf.org /publications/economics/letter/2004/el2004-17.html   (1575 words)

 The Keynesian Model
Though some economists argue that the development of "Keynesian" economics in the 1940s and 1950s involved distortions of the true message of Keynes, it is these developments that had become the conventional wisdom of economics by 1965.
The "Keynesian Revolution" emphasized markets for goods and services as the source of macroeconomic disturbance and de-emphasized monetary and financial sources.
Though by the 1960s most economists had come to accept the Keynesian view that the source of economic disturbance should be sought in the market for good and services, this view is probably no longer a majority position.
ingrimayne.saintjoe.edu /econ/Keynes/Overview12ma.html   (393 words)

 Economics - Open Encyclopedia   (Site not responding. Last check: 2007-11-07)
This includes observable forms of economic activity: money, consumption, preferences, buying, selling, prices etc. Some of the models are simple accounting models, while others postulate specific kinds of economic behavior, such as utility or profit maximization.
An example of a model which illustrates both of these aspects, is the classical mathematical formulation of the Keynesian system involving the consumption function and the national income identity.
Important schools of thought are Classical economics, Marxian economics, Keynesian economics, Neoclassical economics and New classical economics.
open-encyclopedia.com /Economics   (3519 words)

 The Death of Keynesian Economics and New Keynesian Economics
The Keynesian model features many assumptions that are not based on microeconomic theory, for example, the consumption function.
The New Keynesian School represents one of the three major groups of macroeconomists currently in existence.
Recall that this is the argument of the monetarists, early opponents of the Keynesian Model.
darkwing.uoregon.edu /~pshea/Teaching/Econ_313/Lecture_Notes/New_Keynes.html   (2240 words)

 Modern Keynesian Macroeconomics -- An Assault on the Human Mind by Andrew West -- Capitalism Magazine   (Site not responding. Last check: 2007-11-07)
Of course I was able to recite the standard Keynesian economic lines--I've been teaching myself economics for over a decade, learning about the wholesale intellectual bankruptcy of the Keynesian mainstream, and discovering better alternative frameworks.
The largest recent experiment in Keynesian policy, Japan's massive public works spending, failed because it was "small and timid," not due to failure of Keynesian theory.
Keynesian economics cannot be rationally believed in and practiced, because it's not consistent with reality.
www.capmag.com /article.asp?ID=1452   (1303 words)

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