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However, the neoclassical theory also asks what exactly is causing the supply and demand behaviors of buyers and sellers, and how exactly the preferences and productive abilities of people determine the market prices. Therefore, the neoclassical theory of value is a theory of these forces: the preferences and productive abilities of humans.
The Ramsey–Cass–Koopmans model, or Ramsey growth model, is a neoclassical model of economic growth based primarily on the work of Frank P. Ramsey in 1928, [1] with significant extensions by David Cass and Tjalling Koopmans in 1965.
The Harrod–Domar model dominated growth theory until Robert Solow [c] and Trevor Swan [d] independently developed neoclassical growth models in 1956. [55] Solow and Swan produced a more empirically appealing model with "balanced growth" based on the substitution of labor and capital in production. [59]
RBC theory builds on the neoclassical growth model, under the assumption of flexible prices, to study how real shocks to the economy might cause business cycle fluctuations. [ 7 ] The "representative consumer" assumption can either be taken literally or reflect a Gorman aggregation of heterogenous consumers who are facing idiosyncratic income ...
Trevor Winchester Swan (14 January 1918 – 15 January 1989) was an Australian economist.He is best known for his work on the Solow–Swan growth model, published simultaneously by American economist Robert Solow, for his work on integrating internal and external balance as represented by the Swan Diagram, and for pioneering work in macroeconomic modeling, which predated that of Lawrence Klein ...
The neoclassical synthesis is a macroeconomic theory that emerged in the mid-20th century, combining the ideas of neoclassical economics with Keynesian economics. The synthesis was an attempt to reconcile the apparent differences between the two schools of thought and create a more comprehensive theory of macroeconomics.
In 1835, the national debt hit a low of $33,733 when Andrew Jackson was president. But the U.S. started borrowing again as the economy entered a recession in 1837. The country's debt eventually ...
The Harrod–Domar model was the precursor to the exogenous growth model. [4] Neoclassical economists claimed shortcomings in the Harrod–Domar model—in particular the instability of its solution [5] —and, by the late 1950s, started an academic dialogue that led to the development of the Solow–Swan model. [6] [7]