economics was created to explain this failure of supply and demand.
Whereas the Great Depression of the 1930s produced Keynesian
economics, and the stagflation of the 1970s produced Milton Friedman's monetarism, the Great Recession has produced no similar intellectual shift.
A decade ago, two schools of macroeconomists contended for primacy: the New Classical -- or the "freshwater" -- School, descended from Milton Friedman and Robert Lucas and headquartered at the University of Chicago, and the New Keynesian
, or "saltwater," School, descended from John Maynard Keynes, based at MIT and Harvard.
In that essay Cochrane took to task Keynesian
Theory and Policy: A Realistic Analysis of the Market Oriented Capitalist Economy
Summary: When the economy slows, unemployment rises and consumption slumps, smart policymakers blow the dust off their Keynesian
economics books and try to figure out which amount of government expenditure coupled with tax cuts would make optimal capital available to stimulate a prosperous cycle.
This was not always the case insofar as heterodoxy (non-mainstream approaches to economic analysis) predates Keynesian
perspectives by at least several centuries and incorporates sociological, institutionalist, mercantilist and religious forms of enquiry.
ySTANBUL (CyHAN)- Syriza's victory in Greece re-instigated the old debate in Europe between those who advocate fiscal discipline at all costs versus the Keynesian
While international policymakers assume that Europe is suffering a Keynesian
crisis that can be cured with Keynesian
demand management via borrowing or loose monetary policy, this book shows that the European problem results from wrong relative goods prices and wages, caused by an inflationary credit bubble in southern Europe.
Mainstream economics became Keynesian
from the late 1930s through the 1970s.
Besides the outsized role Phillips' research played in the creation of a Keynesian
economic model that survived John Maynard Keynes' death, the man's biography is a whale of a story, which Harford succinctly captures.
One consequence of the so-called microfoundations project was that the field of macroeconomics itself underwent a radical transformation in which models of Keynesian
provenance were pushed off the main stage in favour of dynamic stochastic general equilibrium models occupied by representative agents with rational expectations.