What are the Differences between New Keynesian economics and New classical economics as they relate to...

What are the Differences between New Keynesian economics and New classical economics as they relate to ad-as model?

Expert Solution

New Keynesian economics is a school of contemporary macroeconomics that provides microeconomic foundations for Keynesian economics It is developed partly as a response to criticisms of Keynesian macroeconomics by adherents of new classical macroeconomics.

New Keynesian Economics is a modern macroeconomic school of thought that evolved from classical Keynesian economics. This is the revised theory differs from classical Keynesian thinking in terms of how quickly prices and wages adjust.

New Keynesian advocates maintain that prices and wages are "sticky," meaning they adjust more slowly to short-term economic fluctuations. This lead to explaination to such economic factors as involuntary unemployment and the impact of federal monetary policies.

New classical macroeconomics strives to provide neoclassical microeconomic foundations for macroeconomic analysis. This is in contrast with its rival new Keynesian school that uses microfoundations such as price stickiness and imperfect competition.

NOTE- PLEASE HIT LIKE AND COMMENT FOR FURTHER CLARIFICATIONS. IT'S URGENT.

Rahul Sunny answered 6 months ago

Compare and contrast classical economics and Keynesian economics. What are the major differences between them?

What would you say are the key differences between classical-type economics and Keynesian-style economics?

What would you say are the key differences between classical-type economics and Keynesian-style economics? Which theory (Keynesian or Classical) would you think would be most useful in a major recession? Explain.

New Classical Economics (rational expectations) and New Keynesian Economics are similarly rooted in original Classical and...

New Classical Economics (rational expectations) and New Keynesian Economics are similarly rooted in original Classical and Keynesian economics. Explain and illustrate how these latest manifestations of two diametrically opposed positions, the New Classical rational expectations model and the new Keynesian model: (1) remain true to their respective Classical and Keynesian roots about the inherent stability of the macro economy and the effectiveness of demand management; and (2) at the same time altered the traditional Classical and traditional Keynesian analysis.

Discuss the fundamental differences between the Classical and Keynesian schools of macroeconomics. Use these differences to...

Discuss the fundamental differences between the Classical and Keynesian schools of macroeconomics. Use these differences to motivate a discussion of how inflationary and recessionary gaps can be eliminated through the use of discretionary fiscal policy. Use a graphical analysis and conclude by considering the long-run ramifications of adopting a fiscal budget that is sensitive to movements in the business cycle.

What are the differences and similarities among the New Keynesian, Monetarist and Neo-Classical models in terms...

What are the differences and similarities among the New Keynesian, Monetarist and Neo-Classical models in terms of their predicted outcomes? How do the different assumptions of the models result in policy debates among their respective adherents?

The differences between Classical, Keynesian, Monetarist, and how each of the school of thought stands for...

The differences between Classical, Keynesian, Monetarist, and how each of the school of thought stands for with regard to economic policies; Their differences in their view with regards to: wages and prices, AS curve, Monetary policy or Fiscal policy.

4) Explain the two main differences between the Classical and Keynesian theories of the business cycle?...

4) Explain the two main differences between the Classical and Keynesian theories of the business cycle? 8) A) What is GNP? B) What is the relationship between GNP and NNP?

Government class: Explain the differences between Keynesian and Monetarist (typically associated with Milton Friedman) economics. What...

Government class: Explain the differences between Keynesian and Monetarist (typically associated with Milton Friedman) economics. What do proponents of each side argue, and where have we seen these ideas implemented?

What is the major difference between the classical model and the Keynesian model?

With the long standing debate between Classical Theory and Keynesian Theory, Please summarize the differences including...

With the long standing debate between Classical Theory and Keynesian Theory, Please summarize the differences including which is more supply (production) orientated and which is more demand (consumption) orientated.

Question