want to learn about the different perspectives of macroeconomics theory.that is about th keynesians, classicals, noe-keynesians, neo-classicals and the monetarists.
2007-02-13 23:44:57 · 7 answers · asked by joyce a 1 in Social Science ➔ Economics
I'm an econ grad student at UGA--here's the short and sweet answer: Classical is the basis of macro--the first real theory; supported by Adam Smith and his "invisible hand" concept. When production and GDP are not at their equilibrium (above or below) the market will quickly (within a year or two) work back towards equilibrium all on its own. That is, the market is self-correcting, so the government should not take action.
Keynes offered another view in response to the Great Depression--sometimes the market isn't self correcting (producers wont lower prices). He didn't explain why they would not; but the idea is that government should take action to solve recessions via increased government spending, increase money supply, and/or lower taxes.
Monetarists (Friedman) believe money supply is key to fluctuations in GDP. The government should ensure that there is a predictable, small, constant increase in the money supply to support sustainable growth. AKA, small inflation (3% or so).
Neo-classical is the same as classical, but introduces the rational expectations hypothesis.
Neo-Keynesian is the same as Keynesian, but offers explanations for why prices might not adjust on their own.
2007-02-14 05:00:41 · answer #1 · answered by Econissexy 2 · 0⤊ 0⤋
1. The govt can always give the economy a boost 2. The govt can never give the economy a boost 3. The govt should only give the economy a boost during a recession Remember that money is always either spent or saved. If it is spent, the multiplier effect dictates that people will recive the money you spent & spend it again & more people receive it & so on - whereas saving money is also good for society because it enables banks to finance more expansion projects & loans.
2016-03-29 06:03:15 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Living large in the U.K. and or the U.S.A
No Euro trash to clean up anymore
Freedom to get as rich as you want to be
2007-02-13 23:56:26 · answer #3 · answered by Anonymous · 0⤊ 0⤋
And you really think that such a question could be ventilated here. Get a good economics book.
2007-02-13 23:48:32 · answer #4 · answered by Anthony F 6 · 0⤊ 1⤋
will have to write a long article to answer your question. 3000 words wouldn't even do justice to the topic...
2007-02-13 23:53:00 · answer #5 · answered by xeyaj 2 · 0⤊ 1⤋
then go to class in future
2007-02-13 23:48:11 · answer #6 · answered by tickTickTICK 3 · 1⤊ 2⤋
Zuh!?
2007-02-14 00:01:54 · answer #7 · answered by Girl 3 · 0⤊ 2⤋