Classical vs. Keynesian
Notes from 2/24/16
-Followers:
+J. M. Keynes
-Say's Law:
+Depressions refute Say's Law
+Demand creates its own supply
+Underspending persists
-Savings and Investments
+Savings DO NOT EQUAL Investment
+Different Motivations: Future Needs, Precaution, Habit, Income Level, Interest Rate
-Rate of Profit, Expectations
-Loanable Funds Market
+Investments from savings, cash, checking accounts
+Lending creates money, Sm Increases
+Inflation and Unemployment are unstable
-Wage/ Price Flexibility
+Price and wages are inflexible downward (Ratchet Effect)
-Supply Curve
+HORIZONTAL
-Output and Employment
+AD determines output and employment
-Unemployment
+AD determines output and employment
-Aggregate Demand
+AD changes due to determinants
+AD is unstable even is Sm is stable due to fluctuations in investments
-Basic Equation
+ C + G + Ig + Xn = GDP (1973-Present)
-Role of Government
+Believe in fiscal policy (tax and spend)
+Believe in an active government
+Believes economy is not self-regulating
-Inflation
+Caused by too much demand
-How long the short run is?
+Very Long Time
-Emphasis Today
+Macroeconomics
EXTRA THINGS
*Competition is flawed
*AD is key, not AS
*Leaks and Savings cause recessions
*Believe in long run, WE ARE ALL DEAD
*Believe "sticky wages" block Say's Law
-JaelyNoTainted
Like Jaelyn (SPACE) Not (SPACE) Tainted
Get it?
The best part about this blog was how easy to read it was. All the important things were in bold and the details right under. Things like the says law, the direction of the curve, and what moves the curve were explained in the most practical and to-the-point sense. I don't know why the curve does what it does, but I know when and how, which is really what I would need for a quick review. This being said, a bit more elaboration could be done, but I really like what you have going on now.
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