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Post-Keynesian economists, on the other hand, reject the neoclassical synthesis and, in general, neoclassical economics applied to the macroeconomy. Post-Keynesian economics is a heterodox school that holds that both neo-Keynesian economics and New Keynesian economics are incorrect, and a misinterpretation of Keynes's ideas. The post-Keynesian ...
Keynesian economics were officially discarded by the British Government in 1979, but forces had begun to gather against Keynes's ideas over 30 years earlier. Friedrich Hayek had formed the Mont Pelerin Society in 1947, with the explicit intention of nurturing intellectual currents to one day displace Keynesianism and other similar influences.
Although the theoretical justifications vary, the various schools all hold that government intervention will be much less effective than Keynes had believed, with some advocates even claiming that in the long run interventionist policy will always be counterproductive. [5] Keynesian economics followed on from the Keynesian Revolution.
The article also suggests that it is a clearly Keynesian world of muscular policy makers who have brought in deliberate distortions to improve growth and reduce volatility. [ 16 ] Market liberalism believes that social distribution by the "visible hand" is morally improper, regardless of its effects, because it will infringe on people's freedom.
John Maynard Keynes (right) and Harry Dexter White at the Bretton Woods Conference in 1944. The post-war displacement of Keynesianism was a series of events which from mostly unobserved beginnings in the late 1940s, had by the early 1980s led to the replacement of Keynesian economics as the leading theoretical influence on economic life in the developed world.
Krugman was one of the most prominent advocates of the 2008–2009 Keynesian resurgence, so much so that economics commentator Noah Smith referred to it as the "Krugman insurgency". [ 84 ] [ 85 ] [ 86 ] His view that most peer-reviewed macroeconomic research since the mid-1960s is wrong, preferring simpler models developed in the 1930s, has ...
The 'first postulate' of classical economics was also accepted as valid by Keynes, though not used in the first four books of the General Theory. The Keynesian system can thus be represented by three equations in three variables as shown below, roughly following Hicks. Three analogous equations can be given for classical economics.
The Keynesian revolution has been criticized on a number of grounds: some, particularly the freshwater school and Austrian school, argue that the revolution was misguided and incorrect; [citation needed] by contrast, other schools of Keynesian economics, notably Post-Keynesian economics, argue that the "Keynesian" revolution ignored or ...