Economic Thought After Keynes Overview
12 Questions
0 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

Which school of thought emphasizes the role of market forces and the control of prices?

  • Monetarist economists
  • New Keynesian economists
  • Post-Keynesian economists
  • New classical economists (correct)
  • Which group acknowledges the importance of sticky prices and wages leading to unemployment?

  • Monetarist economists
  • New Keynesian economists (correct)
  • Post-Keynesian economists
  • New classical economists
  • Who challenges neoclassical economics by emphasizing institutions, power relations, and uncertainty in the economy?

  • Monetarist economists
  • New classical economists
  • New Keynesian economists
  • Post-Keynesian economists (correct)
  • According to monetarists, what is the primary tool for managing the economy?

    <p>Control of the money supply</p> Signup and view all the answers

    Which group aims to reconcile the Keynesian vision with mainstream microfoundations?

    <p>New Keynesian economists</p> Signup and view all the answers

    Which of the following best describes the new classical economists' view on government interventions?

    <p>Government interventions may actually worsen economic conditions</p> Signup and view all the answers

    Who recognizes the importance of government intervention and macroprudential regulation in addressing economic instability?

    <p>New Keynesian economists</p> Signup and view all the answers

    What is the primary critique of Keynesian economics by monetarists?

    <p>The lack of focus on controlling the money supply</p> Signup and view all the answers

    Which school of thought represents divergent interpretations of Keynes' legacy proposing different economic analysis approaches?

    <p>Post-Keynesian economists</p> Signup and view all the answers

    Which of the following schools of economic thought emerged after Keynes and incorporates elements of rational expectations?

    <p>New classical economics</p> Signup and view all the answers

    According to new classical economists, what is the relationship between markets and unemployment?

    <p>Markets always clear, meaning there is no involuntary unemployment</p> Signup and view all the answers

    Which of the following schools of economic thought emerged after Keynes and emphasizes the control of the money supply?

    <p>Monetarism</p> Signup and view all the answers

    Study Notes

    Economic Thought After Keynes

    John Maynard Keynes' work during the Great Depression marked the beginning of a significant shift in economic thought, moving beyond the classical approach that emphasized laissez-faire policies. His theories laid the foundation for several schools of economic thought that emerged in the following decades, including monetarism, new classical economics, new Keynesian economics, and post-Keynesian economics.

    Monetarism

    Monetarism, founded by Milton Friedman, is a theory that emphasizes the control of the money supply as the primary tool to manage the economy. According to monetarist economists, changes in the money supply directly impact inflation and can be used to fight inflation.

    Friedman's critique of Keynesian economics centered around the belief that governments should not attempt to fine-tune the economy by managing fiscal policy. Instead, they should focus on controlling the money supply to keep inflation in check and ensure economic stability.

    New Classical Economics

    New classical economists build on the classical economic tradition, incorporating elements of rational expectations and market clearing mechanisms. They argue that markets always clear, meaning there is no involuntary unemployment. Government interventions, according to them, may actually worsen economic conditions and be ineffective in stabilizing the economy.

    New Keynesian Economics

    New Keynesian economists aim to reconcile the Keynesian vision of the economy with the mainstream microfoundations that later dominated macroeconomics. They emphasize the importance of sticky prices and wages, which allows for the existence of unemployment without fully acknowledging the underlying mechanics of Keynes' original contributions.

    Post-Keynesian Economics

    Post-Keynesian economists seek to further develop and expand upon Keynes' original ideas. They challenge the fundamental tenets of neoclassical economics, emphasizing the role of institutions, power relations, and uncertainty in the economy.

    These four schools of thought represent divergent interpretations of Keynes' legacy, each proposing different approaches to economic analysis and policy making. While monetarist and new classical economists emphasize the role of market forces and the control of prices, new Keynesians and post-Keynesians recognize the importance of government intervention and macroprudential regulation in addressing economic instability.

    Studying That Suits You

    Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

    Quiz Team

    Description

    Explore the evolution of economic thought after John Maynard Keynes, including monetarism, new classical economics, new Keynesian economics, and post-Keynesian economics. Learn about the different approaches to economic analysis and policy making that emerged in response to Keynes' work.

    More Like This

    Use Quizgecko on...
    Browser
    Browser