Keynesian economics
Classical follow the basic assumption that
1.economy is in full employment...
2. the wages and prices are very flexible.
3. there is no need of fiscal or monetary
policy.
employment in short
2. wage are rigid and prices are sticky (menu cost, etc)
3. fiscal as well as monitory policy my be needed to
correct the disequilibrium or improve the efficiency of
economy
4. aggregate supply is upward sloping in
run so a rise in aggregate demand may
production as well.
the short
rise the
(1) Unemployment
(2) Law of Market
(3) Equality Between Saving and Investment
(4) Money and Prices
(5) Demand For Money
(6) Short and Long Run Analysis
(7) Role of State in Achieving High Level of
Income and Employment
(8) General Versus Special Theory
(1) Unemployment
(1) Unemployment
classical theory of
employment is based on the
following principles:
(1) Say's Law of Market.
(2) Equilibrium in the Labor Market.
(3) Classical Analysis of Price and
Inflation
".
Assumptions of the
Say's Law of Market:
Determinants of Income:
Determinants of Income:(cont)
Determination of Level of
Employment and Income
AD and AS curve
Diagram/Figure:
Determinant of employment.
(ii)
(iii)
Role of investment.
(iv)
Capitalistic economy.
Keynes Criticism
Further Readings
http://
en.wikipedia.org/wiki/2008%E2%80%932009_Keynesian_resurgence
Mainstream economics
http://en.wikipedia.org/wiki/Mainstream_economics
Neoclassical economics
http://en.wikipedia.org/wiki/Neoclassical_economics
Classical economics
http://en.wikipedia.org/wiki/Classical_economics
Keynesian Economics
http://en.wikipedia.org/wiki/Keynesian_economics