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Questions tagged [keynes]

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1answer
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When can one read the general theory of employment,interest and money?

I am a first-year undergrad econ student and was interested in reading Keynes' book. in the preface, Keynes pointed out that the text deals in the abstract and is meant for his fellow economists. ...
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0answers
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Keynesian model: large and small economies equilibrium

When a large economy adopts a contractionary fiscal policy, for example, and the exchange rates are mobile, there will be a devaluation in the local currency - but there will be no full return (of the ...
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0answers
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Roosevelt’s Price Fixing in The Great Depression

Why didn’t Roosevelt’s method of fixing prices on labour and produce help the depression? If everyone was receiving a wage that allowed them to afford produce, wouldn’t that create a new equilibrium ...
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3answers
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Expected values vs uncertainty

Most models I have seen use expected values. Why is this a better economic model than uncertainty and economic agents thus having to make 'best guesses', with the result of 'animal spirits' playing a ...
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1answer
359 views

What are the assumptions of real business cycle theory and Keynesian theory?

What are the differences between the approaches of Keynes and Real Business Cycle theorists? What are the assumptions made by both the theories? How do they differ in their methodology? Do they ...
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2answers
205 views

What is the logic behind this sentence in Keynes's General Theory?

It seems hard for me to understand the underlying logic of this sentence in Chapter 2 of this book: They do not seem to have realised that, unless the supply of labour is a function of real wages ...
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3answers
1k views

How does an increase in the price of “non-wage-goods” increase employment?

Keynes (1936, Chapter 2) says that based on the classical theory, "there are only four possible means of increasing employment", the fourth of which is: an increase in the price of non-wage-goods ...
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1answer
64 views

How do the wages affect the employment

If we have a condition where employment is lead by the wages does it mean that a wage reduction will cause unemployment?
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0answers
35 views

Keynesian consumption law not applicable in USA ?

I was looking at some numbers and saw that in USA in 2010 consumption was at 70% but savings were close to zero and that even places were there is high income savings are still low while the keynesian ...
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0answers
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IS-LM Effect of Change in Consumer Confidence

What is the effect of government reforms (unspecified) that decrease customer's confidence about their future wages (analysed using the IS-LM model)? I think that less confidence about future wages ...
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3answers
990 views

In what sense are “new-Keynesian” models “new” and in what sense are they “Keynesian”?

Hopefully, the title of this question is quite descriptive. Whilst I have a broad understanding of the research agenda of macroeconomics, I don't have a very good picture of how it is divided into ...