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John Maynard Keynes, 1st Baron Keynes [3] CB, FBA (/ k eɪ n z / KAYNZ; 5 June 1883 – 21 April 1946), was an English economist and philosopher whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments.
Dynamic stochastic general equilibrium modeling (abbreviated as DSGE, or DGE, or sometimes SDGE) is a macroeconomic method which is often employed by monetary and fiscal authorities for policy analysis, explaining historical time-series data, as well as future forecasting purposes. [1]
Another example of a model in ecological economics is the doughnut model from economist Kate Raworth. This macroeconomic model includes planetary boundaries, like climate change into its model. These macroeconomic models from ecological economics, although more popular, are not fully accepted by mainstream economic thinking.
The differentiation between long-run and short-run economic models did not come into practice until 1890, with Alfred Marshall's publication of his work Principles of Economics. However, there is no hard and fast definition as to what is classified as "long" or "short" and mostly relies on the economic perspective being taken.
[2] [3] Macroeconomists study topics such as output/GDP (gross domestic product) and national income, unemployment (including unemployment rates), price indices and inflation, consumption, saving, investment, energy, international trade, and international finance. Macroeconomics and microeconomics are the two most general fields in economics. [4]
[3]: 195–201 Similar models, though called slightly different names, appear in the textbooks by Charles Jones [15] and by Wendy Carlin and David Soskice [14] and the CORE Econ project. [14] Parallelly, texts by Akira Weerapana and Stephen Williamson have outlined approaches where the LM curve is replaced with a real interest rate rule. [15] [16]
The Mundell–Fleming model has been used to argue [3] that an economy cannot simultaneously maintain a fixed exchange rate, free capital movement, and an independent monetary policy. An economy can only maintain two of the three at the same time.
In classical economics, Say's law, or the law of markets, is the claim that the production of a product creates demand for another product by providing something of value which can be exchanged for that other product.