Questions tagged [keynesian-economics]
The keynesian-economics tag has no usage guidance.
69
questions
2
votes
2
answers
108
views
Real wages fluctuation as per classical economics
I have just started studying Macroeconomics and have noticed that as per the Classical economics, the real wage level will always remain same because any change in price level in the market is ...
CommunityBot
- 1
0
votes
1
answer
85
views
How can autonomous private spending change budget surplus?
I was reading Keynesian economics in R.Dornbusch's book where he mentioned the defects of using budget surplus as a measure where he says it can be changed and effected by autonomous private spending ...
CommunityBot
- 1
2
votes
1
answer
614
views
Saving equals investment according to Keynes
In "The General Theory of Employment, Interest and Money", Chapter 6 The Definition of Income Saving and Investment, John Maynard Keynes says:
Income = value of output = consumption + ...
CommunityBot
- 1
0
votes
2
answers
311
views
Balanced budget and change in taxes
Consider a simple Keynesian economy in which the government expenditure ($G$) exactly equals its total tax revenue: $G = tY$ where $t$ is the tax rate and $Y$ is the national income. Suppose that the
...
CommunityBot
- 1
0
votes
1
answer
35
views
Which Spanish scholastic economist said that economies could not be controlled even if one could track every transaction?
Which Spanish scholastic economist said that economies could not be controlled even if one could track every transaction?
I think the context was an argument against Keynesian economics, Cartesian ...
- 465
0
votes
0
answers
7
views
two real gdp at the same price level in ad as model
in a macro book of arnold i see an agg demand-supply model where it seems above the equilibrium price level there are two real gdp for the same price level. the book then goes on to explain that there ...
- 1
0
votes
0
answers
9
views
does the income-output-expenditure method of getting real gdp hold in ad as model
in the ad as model, it seems there's two different real gdp for a given price level when in disequilibrium. does this mean the real gdp counted from the demand side is not equal to the real gdp ...
- 1
0
votes
0
answers
10
views
difference between quantity of real gdp demanded and quantity of real gdp supplied and real gdp
I can't seem to understand why the agg demand curve and agg supply curve both have real gdp at the horizontal axis and price level at the vertical axis. How can the relation between two same ...
- 1
0
votes
0
answers
17
views
Secondary money market effects of expansionary monetary policy using IS-LM model
According to the basic IS-LM model, an outward shift of the LM curve results in higher output because (as shown with the money market chart) expansionary monetary policy reduces the interest rate, ...
2
votes
1
answer
79
views
Why is full employment desired in an economy if competition promotes innovation?
Why is full employment desired in an economy if competition promotes innovation?
In the simple Keynesian model, full employment equilibrium is a desired outcome, as everyone is employed.
However, if ...
- 997
1
vote
2
answers
972
views
What will be the effect on velocity of money when demand for real money increases?
Suppose that a change in government regulations allows banks to start paying
interest on checking accounts. The money stock is the sum of currency and demand
deposits, including checking accounts.
(...
CommunityBot
- 1
1
vote
0
answers
73
views
Keynesian vs classical consumption functions
I am new to studying Economics and am at a loss of intuition to understand the difference between the Classical and Keynesian systems.
The following is my understanding of the two theories:
The ...
- 11
0
votes
0
answers
32
views
A question on short run equilibrium in the simple Keynesian model
In the simple Keynesian model , it's generally assumed that there are no technological changes in the short run. However, as this is a macroeconomic model, changes in one or 2 industries, shouldn't ...
0
votes
1
answer
32
views
In the simple Keynesian model, is full employment of resources really desirable?
In almost every introductory macro economics class, while studying the simple Keynesian model, students are always taught that everyone in the economy always works to achieve full employment of ...
- 56.4k
0
votes
1
answer
152
views
A question on the simple Keynesian model
In the simple keynesian model, the equilibrium is usually calculauted by dteremining where the aggreagate supply curve meets the aggregate demand curve curve, with the AS curve , usually taken to be a ...
0
votes
2
answers
416
views
How did investment go from exogenous to endogenous in the IS/LM model?
Context: I am currently taking an introductory course to macroeconomics and we are on the topic of Keynesian Economic and the IS/LM model.
Initially we saw that the investment (I) component of ...
CommunityBot
- 1
1
vote
1
answer
76
views
Why Increase in Money Supply Reduces Interest Rate in Money Market?
I understand the fact the Increase in Money Supply reduces the interest rate in Money Market.
But these two explanations are confusing me a lot. I'm not able to understand which is correct.
Reason 1
...
- 26
1
vote
2
answers
814
views
Simple Keynesian model of income determination
When determining equilibrium, we take consumption equal to:
\begin{equation*}
C =a_{0} +a_{1} YD
\end{equation*}
where $\displaystyle a_{0}$ is the autonomous consumption or minimum consumption that ...
- 2,735
2
votes
1
answer
54
views
Godley-Lavoie private bank model
Good evening everyone !
I'm currently reading Godley and Lavoie Monetary economics. It's really an awesome book, and I'm at the 7th chapter where they introduce private bank money. The model is very ...
- 760
-1
votes
1
answer
50
views
Post-Keynesian theory and households?
"money must be introduced as part of the production process. Such a process is inherently dynamic, as entrepreneurs in each period must produce a new flow of commodities.” and households have no ...
- 760
1
vote
2
answers
173
views
Saving equals to investment [closed]
How saving equals to investment only in equilibrium?
I'm confused see attached pic
Nd please tell me does it can be true in general too
- 8,369
2
votes
1
answer
41
views
Large National Debt by borrowing money from foreign sources
I have a question about the greater severity of large national debt caused by borrowing from foreign sources.
I am reading a book about elementary Economics and am currently on a chapter discussing ...
- 56.4k
0
votes
1
answer
927
views
Good source for marginal propensity to consume by country?
Is there a good data source that aggregates the MPCs of various countries?
Thanks.
CommunityBot
- 1
0
votes
1
answer
2k
views
What is "industrial capitalism"?
What's the difference between "industrial capitalism" and "agrarian capitalism" and "mercantilism" and the "industrial revolution" and the 20th century ideas of "Keynesianism"?
Is agrarian capitalism-...
CommunityBot
- 1
0
votes
0
answers
48
views
Loosely speaking, are all modern economies 'Keynesian' in their stance on spending during downturns?
Keynesian economics is defined as:
increased government expenditures and lower taxes to stimulate demand and pull the global economy out of the depression.
Do all modern economies adopt a Keynesian ...
- 671
-2
votes
1
answer
86
views
IS LM CURVE QUESTİON
For keynesian model,
Describe how, if at all, each of the following development affect the IS and/or the LM curve, and the equilibrium (r; Y ):
Investment demand becomes less sensitive to the interest ...
- 56.4k
2
votes
2
answers
94
views
What would monetarists do when interest rates approach zero and become ineffective?
So monetarist economists such as Milton Friedman focus on managing the money supply and lower interest rates as a solution to economic downturn. But what would they do in a recession as the interest ...
- 97
2
votes
1
answer
85
views
Why is Keynes attacking the (neo)classical theory of interest rates on the grounds that it is indeterminate?
I do understand that he argues that in order to draw the loanable funds supply curve, you have to already know the volume of income, i.e. production, and therefore the interest rate in advance.
But ...
- 1
1
vote
1
answer
150
views
loanable funds theory: why is the supply of loanable funds equal to saving (+ dishoarding + new money)?
It seems that the loanable funds theory suggests that all that is saved is supplied in the market for loanable funds. This makes sense when we are talking about 'household saving' (i.e. household ...
- 760
0
votes
1
answer
109
views
Why Keynesians prefer short run measures despite straight long-run Phillips curve?
I was studying about the Monetarists' and Keynesians' view of the Phillips curve and natural rate theory of Friedman. It seems intuitive to me as to why Friedman argues that using an expansionary ...
- 56.4k
6
votes
2
answers
536
views
Keynes' conception of investment
Keynes defines saving as equal to investment, saying:
"Having now defined both income and consumption, the definition of saving, which is the excess of income over consumption, naturally follows ....
- 760
3
votes
1
answer
63
views
Would directing more money to science and research and development be an effective response to recessions?
Typical responses to recessions is to follow Keynesian economics and support demand. Would directing money towards science and research and development be a better long term solution to recessions ...
- 29.5k
4
votes
1
answer
179
views
Is Keynesian economic theory still considered capitalism?
When we compare neoclassical economic theory with Keynesian economic theory as they pertain to capitalism, do they both fall within the spectrum of capitalism? or is Keynes's idea of state ...
- 8,345
1
vote
0
answers
37
views
Keynesian cross. Can there be a situation when the point of equilibirum "runs away", shifts in response to attempts to reach it?
In Keynesian cross model, as far as I understand, income-expenditure equilibirum is reached this way:
when unplanned inventory investment>0, then firms produce less, when unplanned inventory ...
- 1,135
-1
votes
1
answer
30
views
Demand-side effects meaning
I found the term of demand-side effects in the abstract of the following paper:
journals-sagepub-com/ DOI/abs/10.1177/0974930619872083 .
What does that mean? Can you explain it to me please? I need ...
- 1,471
1
vote
1
answer
283
views
How can austerity and quantitative easing happen simultaneously?
In 2010 the UK government simultaneously started an austerity program which cut public spending, taking money out of the economy, while enacting a quantitative easing program which injected hundreds ...
CommunityBot
- 1
0
votes
1
answer
112
views
Trying to understanding Mark Blyth’s statement about Keynes
I am reading a book called "Austerity, the history of a dangerous idea" written by Mark Blyth. While talking about Keynes, the author writes:
"he [Keynes] showed that although any worker can ...
- 9,907
4
votes
3
answers
132
views
Do Keyensians believe that it's wrong for households to aggresively save money?
Many Austrian/Neoclassical websites argue that Keynes and Keynesians demonise saving and encourage individual people to spend rather than save. Someone (not an economist) recently told me that I need ...
CommunityBot
- 1
-1
votes
1
answer
107
views
Why incomes should decline in equilibrium state
According to Keynes, the prosperity of a population is measured by the aggregated income of each individual. Spending this income keeps the economy away from a depression. If there is too much ...
1
vote
0
answers
39
views
Difference between IS curve viewed by Keynes and by Friedman
In my economics lectures, we are going through Keynes vs Friedman. As far as I got we have a downward sloping IS curve in the IS-LM model. We get this curve from the Keynesian cross when the rate of ...
- 11
3
votes
1
answer
1k
views
Simple Keynesian model
It is given that economy is at equilibrium at $ Y_0 $ = 1000. If Government undertakes a fiscal change so that tax rate $t$, increases by 0.05 and government spending increases by 50, will the budget ...
CommunityBot
- 1
-1
votes
1
answer
243
views
What are the differences on the impact of a universal basic income from a liberal and a keynesian point of view?
A classmate asked me this and I have no idea how to approach the question. How would I even describe the effects of the universal basic income on the labour market from a Keynesian point of view?
- 29.5k
-1
votes
1
answer
1k
views
Keynesian-cross analysis [closed]
I have a question from my textbook which is:
Using the Keynesian-cross analysis, assume that the consumption function is
given by C = 100 + 0.6(Y – T). If planned investment is 100 and T is 100, then
...
- 224
0
votes
1
answer
113
views
How does the government launch of Tomahawk missiles against Syria affect the economy and governmental budget?
Last night an air strike was launched against Syria of about 60 Tomahawk missiles. At approximately $832,000 apiece, this airstrike cost the US gov't about 49 million dollars. Initially, this sounds ...
- 29.5k
0
votes
1
answer
5k
views
Short run Aggregate supply curve is horizontal or positively sloped?
I want to understand the adjustment process from Very short run production decision to Short run production decision to Long run production decision. As far as I've understood: consider an increase in ...
CommunityBot
- 1
1
vote
1
answer
200
views
IS-LM - Effect of interest rate on price level
I'm starting to study the Keynesian theory, and I have just read that the increase of interest rate ($r$) will lower the price level ($P$). I tried to understand this using the IS-LM model (I mean, ...
- 497
1
vote
1
answer
621
views
Keynesian Cross and Balanced Budget Multiplier
Hi! I am trying to understand the problem above, and was wondering if someone could help me with the last question. I think I am fine with all other questions.
Here is my attempt:
(i)
The fiscal ...
- 721
2
votes
2
answers
4k
views
What is the difference between aggregate supply and GDP?
Usually when I read online, I see the following repeated frequently: aggregate demand is equal to GDP. I understand that aggregate expenditures is the aggregate demand at a particular price level, and ...
1
vote
0
answers
234
views
How is there full employment level at equilibrium level according to Keynesian theory(AD-AS approach)?
According to Keynesian theory :-
Equilibrium level is the point at which Aggregate Demand curve intersects Aggregate Supply curve .
And this point is termed as Full Employment Level
How do we ...
- 247
5
votes
5
answers
1k
views
Where does capital come from?
Sorry if this is a birds and the bees type question. Where does capital come from? And I am not talking human capital (which to my mind is skills basically). I suppose I'm taking about financial ...
