After Keynesian Macroeconomics

After Keynesian Macroeconomics and Discussion

For the applied economist, the confident and apparently successful application of Keynesian principles to economic policy which occurred in the United States in the 1960s was an event of incomparable significance and satisfaction. These principles led to a set of simple, quantitative relationships between fiscal policy and economic activity generally, the basic logic of which could be (and was)...

Intermediate Macroeconomics: Keynesian Models

At the risk of some oversimplification, the leading alternatives to the neoclassical / real business cycle model for understanding short run fluctuations are Keynesian models. I phrase this in the plural because there are multiple different versions of the Keynesian model, which differ in terms of how the aggregate supply block of the economy is formulated. Whereas neoclassical models emphasize...

A Future for Keynesian Macroeconomics

Towards Post - Keynesian Ecological Macroeconomics

The paper starts with a brief criticism of macroeconomic analyses of different schools of thought for their focus on economic growth and maximisation of output. This applies to the traditional Keynesian approach, which has focused on the achievement of sufficient aggregate demand to underpin full employment and full capacity utilisation, down-playing aggregate supply constraints. This also appl...

Intermediate Macroeconomics: New Keynesian Model

Among mainstream academic economists and policymakers, the leading alternative to the real business cycle theory is the New Keynesian model. Whereas the real business cycle model features monetary neutrality and emphasizes that there should be no active stabilization policy by governments, the New Keynesian model builds in a friction that generates monetary non-neutrality and gives rise to a we...