Macro September 28, 2016
“The Classical Adjustment Process to a Macroeconomic Disequilibrium” – review of the Classical model and how it adjusts to decreases (and increases) in Aggregate Demand. Labor market – wages adjust – prices adjust – sales adjust – employment adjusts back to full employment.
Introducing John Maynard Keynes and (1936) The General Theory of Employment, Interest, and Money.
The Refutation of Classical arguments – Say’s Law, S=I due to flexible interest rates, flexible prices are each refuted. Wages and Prices as ‘sticky down.’ Short-run versus Long-run perspectives on ‘who’s right’ between the Classical and Keynesian views. A false dichotomy?