Thursday, February 25, 2016

Classical vs. Keynesian

Classical:


  • Competition is good
  • Self-regulating economy
  • Long Run; economy balanced at full employment 
  • Supports trickle down effect; rich first 
Keynesian:

  • Competition is flawed 
  • AD is key, not AS
  • Leaks and savings cause recessions
  • Ratchet effect and sticky wages blocks Say's Law
  • Long Run; we are dead

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