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Topic: New Keynesian economics

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  Keynesian economics
Keynesian economics (aka Keynesianism) is a 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.
The key central conclusion of Keynesian economics is that there is no strong automatic tendency for the level of output and employment in the economy to move toward the full employment level.
The typical textbook Keynesian analysis suggested that government policy should be used to stimulate demand in response to the unemployment, but reduce it in response to inflation, leading to a contradiction.
www.ebroadcast.com.au /lookup/encyclopedia/ke/Keynesianism.html   (1100 words)

 Keynesian economics - dKosopedia
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.
Instead of the economic process being based on continuous "supply side" improvements in potential output, as most classical economics had focused on from the late 1700s, Keynes asserted the importance of the aggregate demand for goods as the driving factor, especially in downturns.
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.dkosopedia.com /wiki/Keynesian_economics   (3845 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.
New classical economists build their macroeconomic theories on the assumption that wages and prices are flexible.
New Keynesian theories rely on this stickiness of wages and prices to explain why involuntary unemployment exists and why monetary policy has such a strong influence on economic activity.
www.econlib.org /library/Enc/NewKeynesianEconomics.html   (2096 words)

 A Critique of Ceoclassic and New Keynesian Economics
A Critique of Ceoclassic and New Keynesian Economics
I believe that the major neoclassical hypotheses in three crucial areas, on which their conclusions heavily depend, are open to challenge: the nature of the equilibrium that is relevant for the discussion of the matters at issue, the nature of the unemployment observable in the real world, and the implications of the present inflationary environment.
Keynesian analysis is distinctly Marshallian; the relevant timeframe is that in which real-world policy decisions can be designed and carried out-- presumably a relatively short-run period, perhaps extending at most to the medium term, or a series of short-run to medium-term periods.
webhome.idirect.com /~sauta/critique.htm   (3295 words)

 Keynesian economics Summary
Keynesian economics (pronounced /ˈkeɪnzjən/), also called Keynesianism, or Keynesian Theory, is an economic theory based on the ideas of 20th century British economist John Maynard Keynes.
The rise of Keynesianism marked the end of laissez-faire economics (economic theory based on the belief that markets and the private sector could operate well on their own, without state intervention).
Instead of the economic process being based on continuous improvements in potential output, as most classical economists had believed from the late 1700s on, Keynes asserted the importance of aggregate demand for goods as the driving factor of the economy, especially in periods of downturn.
www.bookrags.com /Keynesian_economics   (4371 words)

 economics - Anarchopedia   (Site not responding. Last check: 2007-11-03)
Economics is said to be normative when it recommends one choice over another, or when a subjective value judgment is made.
Economics, which focuses on measurable variables, is broadly divided into two main branches: microeconomics, which deals with individual agents, such as households and businesses, and macroeconomics, which considers the economy as a whole, in which case it considers aggregate supply and demand for money, capital and commodities.
The term economics was coined around 1870 and popularized by influential "neoclassical" economists such as Alfred Marshall (Welfare definition), as a substitute for the earlier term political economy, which referred to "the economy of polities" – competing states.
eng.anarchopedia.org /economics   (4775 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' 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.
Keynesian economics may be theoretically untidy, but it certainly is a theory that predicts periods of persistent, involuntary unemployment.
www.econlib.org /library/Enc/KeynesianEconomics.html   (2440 words)

 Economics - The New School for Social Research
The Department of Economics offers a broad and critical approach to the study of economics, covering a wide range of schools of thought, including Keynesian and post-Keynesian economics; the classical political economy of Smith, Ricardo, and Marx; structuralist and institutionalist approaches to economics; and neoclassical economics.
The courses of study emphasize the historical roots of economic ideas, their application to contemporary economic policy debates, and conflicting explanations and interpretations of economic phenomena, within the context of a rigorous training in the conceptual, mathematical, and statistical modeling techniques that are the common methodological basis of contemporary economic research.
The aim of the Economics department is to put what Robert Heilbroner called "the worldly philosophy"—informed, critical, and passionate investigation of the economic foundations of contemporary society—at the heart of the educational and research enterprise.
www.newschool.edu /gf/econ   (232 words)

 Wikinfo | Keynesian economics
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.
Keynesian analysis suggested that government policy should be used to stimulate demand in response to unemployment, but reduce it in response to inflation, leading to a contradiction.
Attempts to resolve this led to Keynesian ideas losing favour to new ideas based upon neoclassical analysis, including monetarism, supply-side economics and new classical economics.
www.wikinfo.org /wiki.php?title=Keynesian_economics   (1173 words)

 Keynesian Economics
Keynesian economics is the field of economics that is based on the theories advocated by John Maynard Keynes, one of the most influential economists ever.
For example, he believed that if during the Great Depression citizens were hoarding money regardless of how much the government expanded the supply, the government’s only recourse was to spend money in an attempt to restart the circular flow.
Keynesian economists point to the Second World War as a validation of the theory: the Depression ended because the government spent massive amounts of money on defense.
www.iscid.org /encyclopedia/Keynesian_Economics   (247 words)

 ipedia.com: Keynesian economics Article   (Site not responding. Last check: 2007-11-03)
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 193...
The Keynesian response is that such fiscal policy is only appropriate when unemployment is persistently high, above what is now termed the "NAIRU." In that case, crowding out is minimal.
In this era of New Deal liberalism and social democracy, most western capitalist countries enjoyed low, stable unemployment and modest inflation.
www.ipedia.com /keynesian_economics.html   (3862 words)

 [No title]
Thus, Keynesian economics asserts that market economies are prone to persistent and severe unemployment.
New Keynesian’s like Joseph Stiglitz and Gregory Mankiw stress these and other markets imperfections as the cause of unemployment as they argue in favor of activist government policies.
Another common characteristic of Keynesian Economics is the belief that government can improve economic conditions by redistributing wealth from high to low income households.
www.kean.edu /~dmackenz/entries/KeynesianEconomics.doc   (1101 words)

 New Keynesian economics - Wikipedia, the free encyclopedia
The main assumption of New Keynesian economics that distinguishes it from the new classical economics is that wages and prices do not adjust instantly to allow the economy to attain full employment.
New Keynesianism, associated with Gregory Mankiw, once chair of the Council of Economic Advisors under President George W. Bush, is a response to the Robert Lucas and the new classical school.
The new Keynesians, on the other hand, see full employment as being automatically achieved only in the long run, since prices are "sticky" in the short run.
en.wikipedia.org /wiki/New_Keynesian_economics   (583 words)

 New classical economics - Wikipedia, the free encyclopedia
New classical economics emerged as a school in macroeconomics during the 1970s.
Specifically, new classical macroeconomics (NCM) emphasises the importance of rigorous foundations, in which the macroeconomic model is built in analogy to the actions of individual agents, whose behaviour is modelled by microeconomics, in spite of the fact that microeconomic postulates do not carry over to macroeconomics (→Sonnenschein-Mantel-Debreu Theorem).
New Keynesian economics was developed partly in response to NCM – it strives to provide microfoundations for Keynesian economic analysis.
en.wikipedia.org /wiki/New_classical_economics   (319 words)

 Keynesian Economics
Keynesian economics is a theory of aggregate economic phenomena that stresses the importance of total spending at the national level.
Buchannan’s arguments indicate that Keynesian Economics is an intellectual justification for intergenerational transfers of wealth.
New Keynesian economists reject the aggregate analysis of their predecessors in favor of individualistic economic models.
www.kean.edu /~dmackenz/keynes.html   (1535 words)

 [No title]
According to the mesoeconomic diagnosis, the U.S. stagdeficits and malaise and long-term decline are caused by a sectoral clash disease.
Given the research agenda of New Keynesian and New Classical economics, it is not surprising that the world's major economics are enmeshed in ubiquitous unemployment conditions, and economics has again become the dismal science.
In this respect the general equilibrium framework of New Keynesian economics is not appropriate.
www.holycross.edu /departments/economics/RePEc/eej/eeconj/Volume18.rdf   (2158 words)

 CEPR Discussion Paper Abstracts
After a brief review of classical, Keynesian, New Classical and New Keynesian theories of macroeconomic policy, we assess whether New Keynesian Economics captures the quintessential features stressed by JM Keynes.
Particular attention is paid to Keynesian features omitted in New Keynesian workhorses such as the micro-founded Keynesian multiplier and the New Keynesian Phillips curve.
The macroeconomics based on the New Keynesian Phillips curve has quite a way to go before the quintessential Keynesian features are captured.
www.cepr.org /pubs/new-dps/dplist.asp?dpno=4897   (303 words)

 Economics 607 - Core Macro: September 2006
Rotemberg, Julio, "The New Keynesian Microfoundations," NBER Macroeconomics Annual, 1987.
This spring I have a new assignment: to teach Macroeconomics I for graduate students.
Finally, sticky prices play a crucial role in converting this into a theory of real economic fluctuations; while I regard the evidence for such stickiness as overwhelming, the assumption of at least temporarily rigid nominal prices is one of those things that works beautifully in practice but very badly in theory.
economistsview.typepad.com /economics607coremacro/2006/09/index.html   (3097 words)

 John Maynard Keynes
This is generally regarded as probably the most influential social science treatise of the 20th Century, in that it quickly and permanently changed the way the world looked at the economy and the role of government in society.
The Keynesian Revolution split the economics world in two generations: the young climbed over themselves to line up behind Keynes; the old rallied to condemn it.
Of particular importance was the 1937 article by John Hicks which introduced the "IS-LM" representation of Keynes's theory that launched the "Neoclassical-Keynesian Synthesis" that was to pervade in America (and elsewhere) as the dominant form of macroeconomics in the post-war era, particularly in the 1950s and 1960s.
cepa.newschool.edu /het/profiles/keynes.htm   (2466 words)

 EconPapers: 'New Consensus,' New Keynesianism, and the Economics of the 'Third Way'
Abstract: In this paper we seek first to set out the economic analysis that underpins the ideas of what has been termed the "third way." The explicit mention of the "third way" is much diminished since the early days of the Blair government in the UK and the Schroeder government in Germany.
Our paper then focuses on some particular aspects of New Keynesian economics and its emphasis on the role of monetary policy and the downgrading of fiscal policy.
We review this "new consensus" and argue that the empirical evidence on the operation of monetary policy reveals that such a policy is rather impotent.
econpapers.repec.org /paper/levwrkpap/364.htm   (371 words)

 Economics 5410
The evolution of fiscal policy versus monetary policy as stabilizing tools in our economy is described in chapter 17 of our textbook   We will discuss how macroeconomic though has evolved in this century from the early classical school, to the early Keynesian school, the Monetarist school, the new classical school, and the new Keynesian school.
  The evolving majority consensus among economist is described as the new Keynesian school that agrees with the view that fiscal policy can deal with recessionary gaps in the short-run, but it encompasses ideas from both the monetarist and the new classical schools of thought.
New Classical School and the role of the supply side and rational expectations
business.baylor.edu /Tom_Kelly/week5.htm   (558 words)

 Greg Mankiw's Blog: Tobin and the New Keynesians
Labels like "New Keynesian" are intended to place a theory in historical context and to pay homage to intellectual antecedents.
Also, some arch Keynesians like Blinder sought to stimulate the economy on the basis of a fiscal *contraction* in the nineties (or maybe 'twas someone else); that fiscal contractions were expansionary.
Whether for good or bad, "Keynesian" is largely the result of the neoclassical synthesis of Samuelson and Hicks.
gregmankiw.blogspot.com /2006/06/tobin-and-new-keynesians.html   (1060 words)

The dates listed below are guided in part by publication dates for major works and in part by the failure of the Keynesian Model to emerge unchallenged from the 1960's and by inability of its challengers to account for the recession of 1982.
The Simple Keynesian Model, a vastly oversimplified view of the economy, constructs an equilibrium without referring to the labor market.
The Keynesian IS/LM Model shifts from the Classical Model's focus on the wage rate to a focus on long-term and short-term interest rates.
www.econmodel.com /classic/macro1.htm   (400 words)

 PKT message, Colander and New Keynesian Economics
At a post keynesian workshop last summer David presented a paper from a book in progress with Harry Garreston on the macrofoundations of micro.
We call our approach "New Keynesian" because we believe it to be in a theoretical Keynesian tradition that sees macroeconomic coordination failures as possible and various alternative macroequilibria are possible.
In our model, the Keynesian multiple equilbria view of the macro economy is the general theory; the Classical model is a special case of that general theory relevant under the strong assumption that existing institutions better coordinate the aggregate economy than do all other institutional structures....
archives.econ.utah.edu /archives/pkt/1994m01/msg00021.htm   (446 words)

New Keynesian economics believes that government intervention is unnecessary, whereas classical economics
New Keynesian economics assumes that the long-run Phillips curve is vertical, whereas new classical economics views
New Keynesian economics assumes that all prices are flexible, whereas new classical economics applies a fixed-price
www.valdosta.edu /~crtori/MaEX3.html   (843 words)

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