February 22, 2020

ECLECTICS:WHAT DID WE LEARN FROM KEYNES?PART 23

on the monetary and fiscal policies to close inflationary and recessionary gaps.This they argued because the model used sometimes barely recognised that the microeconomic choices by various economic agents like firms,individuals etc were more or less influenced by government policies.To formulate their own rational expectations will contrast sharply government attempt at using stabilization activist policies.A new group of new classical macroeconomists like Leyland and Edward Prescott in their Real Business Cycle models postulated that shifts in the aggregate supply curve are catalyst behind business fluctuations.They noted some important factors responsible for the changes and shifting in aggregate supply curve such as technology like new products,new raw material sources and new methods of production,good or bad weather.They placed less emphasis on monetary policy,that changes in the money supply is caused by changes in real GDP.Now the new keynesians like old keynesians assume that in the short run,prices

No comments:

Post a Comment