Conventional policy discussions are rooted in the (by now old) New Keynesian
tradition of viewing macroeconomic problems as a reflection of frictions that slow convergence to a classical market-clearing equilibrium.
A purported professional consensus has encouraged left-wing Keynesian
economists to preach, with much moral righteousness, against the socalled "austerity programmes" introduced by European governments in the past decade.
The problem of stagnation and widespread unemployment was solved with the application of Keynesian
For instance, an economist who has been trained in a Keynesian-oriented department would tend to interpret a current economic event as per the Keynesian
frame of thought.
The authors derive the Keynesian
model as a special case of the Hicksian IS-LM model and propose a new diagrammatic representation of the Keynesian
model as a regular cross.
In previous parts of this article, we have described how strict financial regulation and Keynesian
prescriptions for full employment brought prosperity for the masses, but reduced corporate profits.
This note puts the naive presentation of the accelerator model into a Keynesian
framework and in this way provides even more clarity to the folly of the initial premise.
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.
'Keynes was in no way the first Keynesian
', Geoff Mann announces in the preface to this important--and highly readable--book.
Our conviction, which we will spell out at greater length in our forthcoming book, The Keynesian
Revolution and Economic Materialism: We're All Dead (Palgrave Macmillan), is that the economic/cultural dichotomy not only dominates how we think about our problem; it is a key cause of the problem.