Did 1970's stagflation completely refute Keynesian economics leading to a permanent shift to Neoliberalism ?

Why have all subsequence economic policies been about centering society around markets with variable levels of spending in countries here and there. But in general the neoliberal paradigm lives on like Govt. spending should be less, budgets should be balanced, markets should be free with less government intervention and eroding labor laws.

What prompted this shift?

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    $\begingroup$ This question needs details and clarity you are mixing things here. There is no neoliberal economics, neoliberalism is political theory not economic one, also Keynesian econ theory did advocate for balanced budget over business cycle, Keynesian were agnostic about labor laws, they also did advocate for free market, they were for macro management not central planning. What do you understand as Keynesian eco? You seem to have some caricature view of it. Also there was shift from Keynesian to neoclassical/neoclassical synthesis econ. If you want to discuss politics perhaps politics.se is better $\endgroup$
    – 1muflon1
    May 9, 2022 at 18:18
  • $\begingroup$ @1muflon1 isn't keynesian also neoclassical ? Because Krugman is considered a neoclassifcal economist according to Ha Joon Chang $\endgroup$
    – Ash Rivers
    May 12, 2022 at 11:20
  • $\begingroup$ yes Krugman’s work is neoclassical, he supported some Keynes ideas but he never professionally did anything Keynesian. None of the models he ever developed were Keynesian in any way. This is precisely my point for example Mankiw who is the best example of New Keynesian (classical Keynesians like Hicks do not exist anymore because the modeling that ignores microfoundations was abandoned and micro founded Keynesian’s are new Keynesian) is small government free market libertarian. It’s simply caricature of Keynes ideas to say they are somehow pro big government anti free market $\endgroup$
    – 1muflon1
    May 12, 2022 at 11:32
  • $\begingroup$ Also Keynesian economics is not neoclassical economics. Neoclassical economics is evolution of classical economics (like New Keynesianism is evolution of Keynesian economics). In neoclassical macro models like RBC there are no demand shortfalls like in New Keynesian (or also old Keynesian) models all shocks are technological. Anyway I am starting to ramble off topic. Point is that your question is unclear because you seem to be asking about caricatures of Keynesian economics that do not really exist. It’s like asking on politics site, so ok where do all democrats hide the secret child $\endgroup$
    – 1muflon1
    May 12, 2022 at 11:36
  • $\begingroup$ Sex trafficking ring if it was not under that pizzeria? That’s clearly a caricature of Democratic Party and you can’t expect political scientists to answer seriously such questions. Also I am using a hyperbole a bit your Q is not as conspiratorial but point is you are talking about some non existing caricatures of Keynesian economics and literally non existent neoliberal economic theory - there simply isn’t anything like that. There is neoliberal politics but no neoliberal economics in sense there are no neoliberal economic theories. Neoliberal politicians borrow both from new classicism and $\endgroup$
    – 1muflon1
    May 12, 2022 at 11:39


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