×
Create a new article
Write your page title here:
We currently have 2,528 articles on Polcompball Wiki. Type your article name above or click on one of the titles below and start writing!



Polcompball Wiki
Polcompball Wiki
2,528Articles
  Recent changes
in:
Ideologies, Centrists, Welfarists,
and 3 more

Keynesian School: Difference between revisions

VisualWikitext
imported>James Davis
No edit summary
No edit summary
 
(98 intermediate revisions by 33 users not shown)
Line 1: Line 1:
<!--there used to be a message-box here-->
{{Ideology
{{Ideology
|themecolor=105bb0
|themecolor=105bb0
|textcolor=b8c1cd
|textcolor=b8c1cd
|title = [[File: Keynes.png]] Keynesianism
|title=[[File:Keynes.png]] Keynesian School
|image = Keynesianism-Pog.png
|image=Keynesianism-Pog.png
|caption = «Hey, remember the Post-War Economic Expansion? It was awesome. Wait, that was 70 years ago? Crazy! Anyway, we should meet back up some time.»
|caption="Hey, remember the Post-War Economic Expansion? It was awesome. Wait, that was 70 years ago? Crazy! Anyway, we should meet back up sometime."
|aliases = Classical Keynesianism <br> Keynesian School <br> Keynesball <br> Centrism of Economics<br>  
|aliases=
|alignments = [[File:Centrist-yellow.png]] [[:Category:Centrists|Centre]]<br>
Keynesianism<br>
[[File:Cap.png]] [[:Category:Capitalists|Capitalists]] <br>
<s>Armchair social liberalism</s><br>
{{Alias|Keynes.png|{{PAGENAME}}|[[File:LibSocKey.png]] Liberal Socialism}}<br>
{{Alias|Misestard.png|Austrian School|[[File:Ormarxf.png]][[File:ML.png]] Communism}} (pejoratively)<br>
Centrism of Economics<br>
Post-Great Depression capitalism
|alignments=
[[File:Centrist-yellow.png]] [[:Category:Centrists|Centrist]]<br>
[[File:Cap.png]] [[:Category:Capitalists|Capitalists]]<br>
[[File:Welf.png]] [[:Category:Welfarists|Welfarists]]
[[File:Welf.png]] [[:Category:Welfarists|Welfarists]]
|likes = When the govt goes SPENDDDDD, Breaking Windows, Spending money, The New Deal, [[File:Bankocracy.png]] The Central Bank
|likes=
|dislikes = Saving money, The Gold Standard, Austrian Economists
When the government goes SPENDDDDD<br>
|theorists =
Bricking Windows<br>
*[[File:Soclib.png]] [[Social Liberalism|John Maynard Keynes]] (1883-1946), [[File:Cball-England.png]] England
Spending money<br>
*[[File:Kalecki.png]] [[Neo-Marxism|Michał Kalecki]] (1899-1970), [[File:Cball-Poland.png]] Poland
[[File:FDRismF.png]] The New Deal<br>
*[[File:NuKeynesPix.png]] [[Social Liberalism|Paul Samuelson]] (1915-2009), [[File:Cball-US.png]] USA
[[File:Central_bank.png]] The Central Bank
*[[File:Socgeo.png]] [[Social Georgism|Joseph Stiglitz]] (1943-), [[File:Cball-US.png]] United States
|dislikes=
*[[File:Balcerowicz.png]] [[Neoliberalism|Leszek Balcerowicz]] (1947-), [[File:Cball-Poland.png]] Poland
Saving money<br>
*[[File:Newkeynes.png]] [[Social Liberalism|Paul Krugman]] (1953-), [[File:Cball-US.png]] USA
The Gold Standard<br>
*[[File:Socdem.png]] [[Social Democracy|Thomas Piketty]] (1971-), [[File:Cball-France.png]] France
[[File:Austrobert.png]] Austrian Economists
*[[File:Newkeynes.png]] [[Monetarism|Ben Bernanke]] (1953-), [[File:Cball-US.png]] USA
|theorists=
*[[File:Friedman.png]] [[Chicagoan Libertarianism]] (Later On)
[[File:Cball-Commonwealth.png]] '''Commonwealth Realm''' {{Collapse|
*[[File:Keynes.png]] [[Social Liberalism|John Maynard Keynes]] (1883-1946) [[File:Cball-UK.png]] UK
*[[File:ClementAttlee.png]] [[Democratic Socialism|Clement Attlee]] (1883-1967) [[File:Cball-UK.png]] UK
*[[File:OswaldMosley.png]] [[British Fascism|Oswald Mosley]] (1896-1980) [[File:Cball-UK.png]] UK
*[[File:Brownism.png]] [[Third Way|Gordon Brown]] (1951-) [[File:Cball-UK.png]] UK
*[[File:ALP.png]] [[Third Way|Kevin Rudd]] (1957-) [[File:Cball-Australia.png]] Australia}}
[[File:PanAmer.png]] '''Americas''' {{Collapse|
*[[File:FDRismF.png]] [[Social Liberalism|Franklin D. Roosevelt]] (1882-1945) [[File:Cball-US.png]] USA
*[[File:Truman.png]] [[Neoconservatism|Harry S. Truman]] (1884-1972) [[File:Cball-US.png]] USA
*[[File:Long.png]] [[Longism|Huey Long]] (1893-1935) [[File:Cball-US.png]] USA
*[[File:JuanPeron.png]] [[Peronism|Juan Perón]] (1895-1974) [[File:Argentina.png]] Argentina
*[[File:Lyndon B. Johnson.png]] [[Social Liberalism|Lyndon B. Johnson]] (1908-1973) [[File:Cball-US.png]] USA
*[[File:Friedman.png]] [[Chicago School|Milton Friedman]] (1912-2006) [[File:Cball-US.png]] USA (Later On)
*[[File:NuKeynesPix.png]] [[Social Liberalism|Paul Samuelson]] (1915-2009) [[File:Cball-US.png]] USA
*[[File:Leigh.png]] [[Authoritarian Conservatism|Gustavo Leigh]] (1920-1999) [[File:Cball-Chile.png]] Chile
*[[File:Auth3Way.png]] [[Social Authoritarianism|Carlos Andrés Pérez]] (1922-2010) [[File:Cball-Venezuela.png]] Venezuela
*[[File:BrazilPRONA.png]] [[Welfare Chauvinism|Enéas Carneiro]] (1938-2007) [[File:Cball-Brazil.png]] Brazil
*[[File:Socgeo.png]] [[Social Georgism|Joseph Stiglitz]] (1943-) [[File:Cball-US.png]] USA
*[[File:Lula.png]] [[Socialism of the 21st Century|Luiz Inácio Lula da Silva]] (1945-) [[File:Cball-Brazil.png]] Brazil
*[[File:Newkeynes.png]] [[Neoliberalism|Paulo Guedes]] (1949-) [[File:Cball-Brazil.png]] Brazil
*[[File:Newkeynes.png]] [[Social Liberalism|Paul Krugman]] (1953-) [[File:Cball-US.png]] USA
*[[File:Newkeynes.png]] [[Monetarism|Ben Bernanke]] (1953-) [[File:Cball-US.png]] USA
*[[File:Newkeynes.png]] [[Neoliberalism|Lawrence Summers]] (1954-) [[File:Cball-US.png]] USA
*[[File:Klep.png]] [[Kleptocracy|Rod Blagojevich]] (1956-) [[File:Cball-US.png]] USA
*[[File:Obamium.png]] [[Third Way|Barack Obama]] (1961-) [[File:Cball-US.png]] USA
*[[File:Postkeynes.png]] [[Left-Wing Populism|Stephanie Kelton]] (1969-) [[File:Cball-US.png]] USA
}}
[[File:Cball-EU.png]] '''Europe''' {{Collapse|
*[[File:SwedenSocDem.png]] [[Guild Socialism|Ernst Wigforss]] (1881-1977) [[File:Cball-Sweden.png]] Sweden
*[[File:Mussolini.png]] [[Fascism|Benito Mussolini]] (1883-1945) [[File:Cball-King-Italy.png]] Italy
*[[File:SwedenSocDem.png]] [[Nordic Model|Per Albin Hansson]] (1885-1946) [[File:Cball-Sweden.png]] Sweden
*[[File:Gaullismicon2.png]] [[Gaullism|Charles de Gaulle]] (1890-1970) [[File:Cball-France.png]] France
*[[File:Kalecki.png]] [[Neo-Marxism|Michał Kalecki]] (1899-1970) [[File:Cball-Poland.png]] Poland
*[[File:Popolar.png]] [[Paternalistic Conservatism|Aldo Moro]] (1916-1978) [[File:Cball-Italy.png]] Italy
*[[File:PS.png]] [[Social Democracy|Francois Mitterand]] (1916-1996) [[File:Cball-France.png]] France
*[[File:GerSPD.png]] [[Social Democracy|Helmut Schmidt]] (1918-2015) [[File:Cball-Germany.png]] Germany
*[[File:OlofPalme.png]] [[Left-Wing Populism|Olof Palme]] (1927-1986) [[File:Cball-Sweden.png]] Sweden
*[[File:Balcerowicz.png]] [[Neoliberalism|Leszek Balcerowicz]] (1947-) [[File:Cball-Poland.png]] Poland
*[[File:Socdem.png]] [[Social Democracy|Thomas Piketty]] (1971-) [[File:Cball-France.png]] France}}
[[File:PanAsian.png]] '''Asia''' {{Collapse|
*[[File:ParkChungHee.png]] [[Ilminism|Park Chung-hee]] (1917-1979) [[File:Cball-South Korea.png]] South Korea
*[[File:ZhuRongji.png]] [[Dengism|Zhu Rongji]] (1928-) [[File:Cball-China.png]] China
*[[File:Hujintao.png]] [[Dengism|Hu Jintao]] (1942-) [[File:Cball-China.png]] China
*[[File:Thaksin.png]] [[Social Authoritarianism|Thaksin Shinawatra]] (1949-) [[File:Thailand.png]] Thailand
*[[File:BoXilai.png]] [[Dengism|Bo]] [[Social Authoritarianism|Xilai]] (1949-) [[File:Cball-China.png]] China
*[[File:NajibRazak.png]] [[Neoliberalism|Najib Razak]] (1953-) [[File:Cball-Malaysia.png]] Malaysia
*[[File:DemocraticPartyKorea.png]] [[Social Liberalism|Moon Jae-in]] (1953-) [[File:Cball-South Korea.png]] South Korea
*[[File:ShinzoAbe.png]] [[National Conservatism|Shinzo Abe]] (1954-2022) [[File:Cball-Japan.png]] Japan
*[[File:Newkeynes.png]] [[Reactionary Liberalism|Yōichi Takahashi]] (1955-) [[File:Cball-Japan.png]] Japan
*[[File:Kochikai.png]] [[National Conservatism|Fumio Kishida]] (1957-) [[File:Cball-Japan.png]] Japan
}}
 
|examples=
|examples=
*[[File:Cball-Sweden.png]] [[Social Liberalism|Stockholm School]]
*[[File:Cball-Sweden.png]] [[Nordic Model|Stockholm School]]
*[[File:Cball-England.png]] [[Social Liberalism|Cambridge University]]
*[[File:Cball-England.png]] [[Social Liberalism|Cambridge University]]
*[[File:Cball-Japan.png]] [[W:Economy of Japan|Japanese Economic Model]]
*[[File:Cball-Japan.png]] [[Reactionary Liberalism|Japan]] (1945-)
|song=
*[[File:Cball-USA.png]] [[Federalism|U]][[Social Liberalism|S]][[Neoconservatism|A]] (1933-1953)
|song=[https://youtu.be/d0nERTFo-Sk Keynes vs. Hayek - Rap Battle]<br>
[https://youtu.be/GTQnarzmTOc Keynes vs. Hayek - Rap Battle Round Two]<br>[https://youtu.be/7ftQv5RQJH0 Window - Fiona Apple]
|sub=
[[File:NuKeynesPix.png]] '''Neo-Keynesianism''' {{Collapse|
*[[File:Neoclassical.png]] [[Chicago School|Neo-Classical Economics]]
}}
[[File:Newkeynes.png]] '''New Keynesianism''' [[File:New-Neoclassical.png]] {{Collapse|
*[[File:Georgist.png]] [[Georgism]]
*[[File:Monet.png]] [[Monetarism]]
*[[File:Neoliberal-icon.png]] [[Neoliberalism]]
}}
[[File:Postkeynes.png]] '''Post-Keynesianism''' [[File:Marxism-Keynesianism.png]] {{Collapse|
*[[File:Neomarx.png]] [[Neo-Marxism]]
*[[File:Neoricardosoc.png]] [[Ricardian Socialism|Neo-Ricardianism]]
}}
|variants=
[[File:Sluhanarodu.png]] '''Hetmanomics''' {{Collapse|
*[[File:AntiAusterity.png]] Anti-Austerity
*[[File:Trustbust.png]] Anti-Businesses
*[[File:Russophilia.png]] Russophilia
*[[File:Kak.png]] [[Kakistocracy]]
*[[File:Klep.png]] [[Kleptocracy]]
*[[File:Ormarxf.png]] [[Marxism]] (Accused)
*[[File:Putin.png]] [[Authoritarian Conservatism|Putinism]]
*[[File:PostSoviet.png]] [[Conservative Socialism|Soviet Nostalgia]] (Kinda)
*[[File:XiJinpingThoughtf.png]] [[Dengism|Xi Jinping Thought]]
*[[File:Zelensky.png]] [[Populism|Zelenskyism]]
}}
|influences=
|influences=
[[File:Regulationism.png]] [[Regulationism]]<br>
[[File:Regulationism.png]] [[Regulationism]]<br>
Line 31: Line 118:
[[File:Technocracy.png]] [[Technocracy]]<br>
[[File:Technocracy.png]] [[Technocracy]]<br>
[[File:SocCred.png]] [[Social Credit]]<br>
[[File:SocCred.png]] [[Social Credit]]<br>
[[File: Protect.png]] [[Protectionism]] (Historically, now sometimes)<br>
[[File:Protect.png]] [[Protectionism]] (Historically, now sometimes)<br>
[[File:Malthus.png]] {{PCBA|Malthusian Theory|Malthusianism}}<br>
[[file:FDRismF.png]] [[New Deal Liberalism]]<br>
|influenced=
|influenced=
[[File:Chilib.png]] [[Chicagoan Libertarianism]]<br>
[[File:Chilib.png]] [[Chicago School]]<br>
[[File:LDP(Japan).png]] [[Reactionary Liberalism|Japan LDPism]]<br>
[[File:LDP(Japan).png]] [[Reactionary Liberalism|Japan LDPism]]<br>
[[File:Corptism.png]] [[Corporatism]]<br>
[[File:Socdem.png]] [[Social Democracy]]<br>
[[File:Socdem.png]] [[Social Democracy]]<br>
[[File:NajibRazak.png]] [[Reactionary Liberalism|Najibnomics]] (Some)<br>
[[File:NajibRazak.png]] [[Neoliberalism|Najibnomics]] (Some)<br>
[[File:Neoliberal-icon.png]] [[Neoliberalism]]
[[File:Neoliberal-icon.png]] [[Neoliberalism]]<br>
<br>
[[File:Thaksin.png]] [[Social Authoritarianism|Thaksinism]]<br>
[[File:Centro Democratico.png]] [[Neoconservatism|Uribism]]}}'''Keynesianism''' is an economically centrist ideology, whose general economic theory was pretty popular back in the day and still is in most of the western countries and [[File:Cball-Japan.png]] Japan. He believes that the state should [[File:Regulationism.png]] [[Regulationism|intervene]] in the economy to level out the economic cycle so businesses can make long-term investments and allow for long-run growth. He plans to do this by lowering taxes, lowering interest rates, and increasing spending when the economy busts, but also by cutting spending, raising interest rates, and raising taxes during economic booms.
}}
The '''Keynesian School''' is an economically centrist ideology, whose general economic theory was pretty popular back in the day and still is in most of western countries and [[File:Cball-Japan.png]] Japan. He believes that the state should [[File:Regulationism.png]] [[Regulationism|intervene]] in the economy to level out the economic cycle so businesses can make long-term investments and allow for long-run growth. He plans to do this by lowering taxes, lowering interest rates, and increasing spending when the economy busts, but also by cutting spending, raising interest rates, and raising taxes during economic booms.
 
==History==
==History==
Keynesian economics was developed by the British economist John Maynard Keynes during the 1930s in an attempt to understand the Great Depression.
Keynesian economics was developed by the British economist John Maynard Keynes during the 1930s in an attempt to understand the Great Depression.


==Variants==
==Variants==
===[[File:NuKeynesPix.png]] Neo-Keynesianism===
===[[File:NuKeynesPix.png]] Neo-Keynesian Economics===
 
The '''Neo-Keynesian Economic Theory''' is an economically centrist economic system, whose general economic theory is derived from the Neo-Classical economic thought in a mix with Keynesian economics.
'''Neo-Keynesianism''' is an economically centrist ideology, whose general economic theory derived from the Neo-Classical economic thought in a mix with Keynesian economics.


A group of economists sought to synthesize the work of Keynes with numerous aspects of the neoclassical economic orthodoxy, this came to be known as the Neoclassical synthesis. This framework largely retained neoclassical analysis with regards to microeconomics and analysis on the level of the individual and/or the firm, while incorporating Keynesian analysis with regards to macroeconomics. This school of thought was dominant from the 1950s to the 1970s. Neo-Keynesianism fell out of favor due to the [https://en.wikipedia.org/wiki/Stagflation stagflation] of the 1970s and the work of monetarists such as [https://en.wikipedia.org/wiki/Milton_Friedman Milton Friedman].
A group of economists sought to synthesize the work of Keynes with numerous aspects of the neoclassical economic orthodoxy, this came to be known as the Neoclassical synthesis. This framework largely retained neoclassical analysis with regards to microeconomics and analysis on the level of the individual and/or the firm, while incorporating Keynesian analysis with regards to macroeconomics. This school of thought was dominant from the 1950s to the 1970s. Neo-Keynesianism fell out of favor due to the stagflation of the 1970s and the work of monetarists such as [[File:Friedman.png]]  [[Chicago School|Milton Friedman]].


The two most prominent economic models with roots in Neo-Keynesian thought are:
The two most prominent economic models with roots in Neo-Keynesian thought are:
*[https://en.wikipedia.org/wiki/IS%E2%80%93LM_model IS-LM model]: It relates aggregate demand and employment to three exogenous quantities, i.e. the amount of money in circulation, the government budget, and the state of business expectations. It became really popular as a way to analyze the effect demand shocks on the overall economy
*[[w:IS%E2%80%93LM_model|IS-LM model]]: It relates aggregate demand and employment to three exogenous quantities, i.e. the amount of money in circulation, the government budget, and the state of business expectations. It became really popular as a way to analyze the effect demand shocks on the overall economy
*[https://en.wikipedia.org/wiki/Phillips_curve Phillips curve] : This curve was an empirical view of analyzing, to get to the conclusion, that more inflation would cause a lower employment rate.
*[[w:Phillips_curve|Phillips curve]] : This curve was an empirical view of analyzing, to get to the conclusion, that more inflation would cause a lower employment rate.


===[[File:Postkeynes.png]] Post-Keynesianism===
===[[File:Postkeynes.png]] Post-Keynesian Economic Theory===
'''Post-Keynesianism''' is a more left-wing current of economic thought developed from the 1930s in England and the United States, where it is currently most present, which presents itself as the closest current to Keynes' ideas. It takes the most radical views of Keynes, who throughout his life has moved further and further away from neoclassicals. As such Post-Keynesianism takes a position radically opposed to that of neoclassical economics by emphasizing the following points:
The [[File:Marxism-Keynesianism.png]] '''Post-Keynesian Economic Theory''' is a more left-wing current of economic thought developed from the 1930s in England and the United States, where it is currently most present, which presents itself as the closest current to Keynes' ideas. It takes the most radical views of Keynes, who throughout his life has moved further and further away from [[File:Neoclassical.png]] neoclassicals. As such, the Post-Keynesian economic theory takes a position radically opposed to that of neoclassical economics by emphasizing the following points:


* A realistic and non-instrumentalist epistemology. The assumptions made by post-Keynesians must correspond to reality; they do not have a simple predictive function.
* A realistic and non-instrumentalist epistemology. The assumptions made by post-Keynesians must correspond to reality; they do not have a simple predictive function.
Line 61: Line 152:
* Giving up on the assumptions of absolute or even limited rationality of agents.
* Giving up on the assumptions of absolute or even limited rationality of agents.
* Considering the problem of scarcity in the economy as secondary; and placing the problems of production, reproduction, growth, and circulation at the center of the analysis.
* Considering the problem of scarcity in the economy as secondary; and placing the problems of production, reproduction, growth, and circulation at the center of the analysis.
* Favorising state interventionism over the free market.
* Flavoring state interventionism over the free market.
* Inflation is analyzed from a cost-push perspective. Money is endogenous, wages in monetary terms are determined by oligopolies and unions, and the stock of capital is homogeneous.
* Inflation is analyzed from a cost-push perspective. Money is endogenous, wages in monetary terms are determined by oligopolies and unions, and the stock of capital is homogeneous.


===[[File:Newkeynes.png]] New Keynesianism===
===[[File:Newkeynes.png]] New Keynesian Economic Theory===
'''New Keynesianism''' is a macroeconomic school of thought that strives to provide more consistent micro-foundations to Keynesianism in response to sustained attacks from New-Classical economists.
The [[File:New-Neoclassical.png]] '''New Keynesian Economic Theory''' is a macroeconomic school of thought that strives to provide more consistent micro-foundations to the Keynesian  economic theory in response to sustained attacks from [[File:Neoclassical.png]] New-Classical economists.
Like Neo-Keynesianism, New Keynesianism is Keynesian in the short run but neoclassical in the long run.  
Like the Neo-Keynesian economic theory, the New Keynesian economic theory is Keynesian in the short run but neoclassical in the long run.  


However, unlike the neoclassical synthesis, New Keynesianism attempts to provide theoretical explanations for a variety of market failures, mainly through Microeconomic Foundations and [[w:Rational expectations|Rational Expections]]
However, unlike the neoclassical synthesis, the New Keynesian economic Theory attempts to provide theoretical explanations for a variety of market failures, mainly through Microeconomic Foundations and [[w:Rational expectations|Rational Exceptions]]
* [https://en.wikipedia.org/wiki/Menu_cost Menu costs]: The restaurants can print out new menus in response to their price changes, hence the name. However, menu cost is actually the cost of firms adjusting their nominal prices. The burden causes businesses to change prices slowly rather than continuously. The macroeconomic effect of changing a single firm's price on the demand of all products is called the "aggregate-demand externality."
* [[w:Menu_cost|Menu costs]]: The restaurants can print out new menus in response to their price changes, hence the name. However, menu cost is actually the cost of firms adjusting their nominal prices. The burden causes businesses to change prices slowly rather than continuously. The macroeconomic effect of changing a single firm's price on the demand of all products is called the "aggregate-demand externality."
* [https://en.wikipedia.org/wiki/Calvo_(staggered)_contracts The staggering of prices]: According to New Keynesians, enterprises don't set prices at the exact same time. Each one cares about its price relative to the ones charged by other firms. As a result, the prices are sluggish because no firms want to be the first to increase its price significantly.
* [[w:Calvo_(staggered)_contracts|The staggering of prices]]: According to New Keynesians, enterprises don't set prices at the exact same time. Each one cares about its price relative to the ones charged by other firms. As a result, the prices are sluggish because no firms want to be the first to increase its price significantly.
* [https://en.wikipedia.org/wiki/Coordination_failure_(economics) Coordination failure]: In the real world, the number of businesses is very large, so it's hard to predict what others may do after the adjustment of the money supply. The failure of businesses to coordinate the changes in prices is a possible explanation for recessions.
* [[w:Coordination_failure_(economics)|Coordination failure]]: In the real world, the number of businesses is very large, so it's hard to predict what others may do after the adjustment of the money supply. The failure of businesses to coordinate the changes in prices is a possible explanation for recessions.
* [https://en.wikipedia.org/wiki/Efficiency_wage Efficiency wages]: Markets may fail to clear due to the tendency for employers to pay above equilibrium wages. Abnormally high wages cause existing workers to be more productive and thus less likely to switch to a new job.
* [[w:Efficiency_wage|Efficiency wages]]: Markets may fail to clear due to the tendency for employers to pay above equilibrium wages. Abnormally high wages cause existing workers to be more productive and thus less likely to switch to a new job.


Moreover, New Keynesianism has two models that don't appear in the last iteration of Keynesianism:
Moreover, the New Keynesian economic theory has two models that don't appear in the last iteration of the Keynesian Scool:
* '''New Keynesian DSGE model:''' Enterprises and households are assumed to have rational expectations, but prices are set by monopolistically competitive firms and can't shift quickly or without cost.
* '''New Keynesian DSGE model:''' Enterprises and households are assumed to have rational expectation, but prices are set by monopolistically competitive firms and can't shift quickly or without cost.
* '''New Keynesian Phillips Curve:''' Like an expectations-augmented Phillips curve, it implies that the trade-off between unemployment and inflation is only applicable in the short run.
* '''New Keynesian Phillips Curve:''' Like an expectations-augmented Phillips curve, it implies that the trade-off between unemployment and inflation is only applicable in the short run.


==Tenets==
==Tenets==
Keynesianism advocates for appropriate fiscal (by the government) and monetary (by the central bank) policies to manage aggregate demand to correct the boom and bust cycles. He also desires full employment.
Keynesian economics is considered a "demand-side" theory that focuses on changes in the economy over the short run. Keynes’s theory was the first to sharply separate the study of economic behavior and markets based on individual incentives from the study of broad national economic aggregate variables and constructs. 
 
Based on his theory, Keynes advocated for increased government expenditures and lower taxes to stimulate demand and pull the global economy out of the depression. Subsequently, Keynesian economics was used to refer to the concept that optimal economic performance could be achieved—and economic slumps prevented—by influencing aggregate demand through activist stabilization and economic intervention policies by the government.
 
[[File:John-Maynard-Keynes-Next-To-Wife.jpg|thumb|John Maynard Keynes photographed next to his wife, Lydia.]]
 
Keynesian economics represented a new way of looking at spending, output, and inflation. Previously, what Keynes dubbed classical economic thinking held that cyclical swings in employment and economic output create profit opportunities that individuals and entrepreneurs would have the incentive to pursue, and in so doing correct the imbalances in the economy. According to Keynes’s construction of this so-called classical theory, if aggregate demand in the economy fell, the resulting weakness in production and jobs would precipitate a decline in prices and wages. A lower level of inflation and wages would induce employers to make capital investments and employ more people, stimulating employment and restoring economic growth. Keynes believed that the depth and persistence of the Great Depression, however, severely tested this hypothesis.
 
In his book, The General Theory of Employment, Interest, and Money and other works, Keynes argued against his construction of classical theory, that during recessions business pessimism and certain characteristics of the market economies would exacerbate economic weakness and cause aggregate demand to plunge further.
 
For example, Keynesian economics disputes the notion held by some economists that lower wages can restore full employment because labor demand curves slope downward like any other normal demand curve. Instead, he argued that employers will not add employees to produce goods that cannot be sold because demand for their products is weak. Similarly, poor business conditions may cause companies to reduce capital investment, rather than take advantage of lower prices to invest in new plants and equipment. This would also have the effect of reducing overall expenditures and employment.e


==Personality==
==Personality==
Keynesianism is the sort of guy who you know you can ask for help on homework, but you can't really remember ever having a proper conversation. He can become a little obsessive when it comes to refining mathematical models to prove his point, and this can make him seem disconnected. 
Keynesian School is the sort of guy who you know you can ask for help on homework, but you can't really remember ever having a proper conversation. He can become a little obsessive when it comes to refining mathematical models to prove his point, and this can make him seem disconnected. 


===Stylistic Notes===
===Stylistic Notes===
Keynesianism has multiple jokes about him which are displayed in his behaviours:
Keynesian School has multiple jokes about him which are displayed in his behaviors in comics:


*He likes to break other people's windows.
*He likes to break other people's windows.
*Likes to bury money in ditches to dig it up again.
*Likes to bury money in ditches to dig it up again.
*[https://www.youtube.com/watch?v=D7pKjTfrETI Big Consoomer]
*Big consoomer
*<s>Likes to have gay sex with twinks.</s>
*<s>Likes to have gay sex with twinks.</s>


== How to Draw==
==How to Draw==
The ball design is based on the Coat of Arms of John Maynard Keynes (Specifically the Escutcheon, a.k.a. the Shield)
{{COA|Keynes_COA.svg}}
{{COA|Keynes_COA.svg}}
The ball design is based on the Coat of Arms of John Maynard Keynes (Specifically the Escutcheon a.k.a. the Shield)


#Draw a ball.
#Draw a ball
#Fill it with blue.
#Fill it with blue
#Draw three grey diagonal lines from top left to bottom right.
#Draw three grey diagonal lines (two thin with one thick in the middle) from top left to bottom right
#Draw two fleur-de-lis symbols in bottom left and top right with the same color.
#Draw two fleur-de-lis symbols in the bottom left and top right with the same color
# Draw the eyes and you're done.
#Draw the eyes  
And you're done.
 
{{Flag-auto
{{Flag-auto
|c1 = Blue
|c1 = Blue
Line 109: Line 212:


==Relationships==
==Relationships==
===Friends===
*[[File:Soclib.png]] [[Social Liberalism]] - He's a good student who tends to agree with me on civil liberties. Just would like to see him go a bit further when it comes to economic interventionism.
*[[File:Patcon.png]] [[Paternalistic Conservatism]] - You listened to my arguments and not [[File:Fiscon.png]] [[Fiscal Conservatism|his]], smart move.
*[[File:Socdem.png]] [[Social Democracy]] - I justify for him whatever he is doing.
*[[File:Indust.png]] [[Industrialism]] - I helped him grow after WW2.
*[[File:Lpop.png]] [[Left-Wing Populism]] - Yes! We can afford everything, definitely! <s>Those corporate bailouts are necessary though</s>
*[[File:Regulationism.png]] [[Regulationism]] - I'm literally the same as him, but with more specific end goals and more precise rhetoric from some British chap named John!
*[[File:Neoprog.png]] [[Third_Way#Neoprogressive_Hawk|Neoprogressive Hawkism]] - Couldn't care less for social progress but the welfare and military spending are nice
*[[File:necon.png]] [[Neoconservatism]] - Military spending is a great way to help the economy!
*[[File:Libhawk.png]] [[Neoconservatism|Liberal Hawkism]] - A militarist social liberal? Even better.
*[[File:MilSoc.png]] [[Social_Democracy#Militant_Social_Democracy|Militant Social Democracy]] - A militarist social democrat? How do these consistently become better and better?
*[[File:Bankocracy.png]] [[Financialism]] - We need a strong central bank.
*[[File:Georgist.png]] [[Georgism]] - Both Stiglitz and Krugman like your idea of a Land Value Tax. Not sure it should replace all other taxes though.


=== Friends ===
===Frenemies===
*[[File:Hayek.png]]  [[Hayekism]] - ''"In the long term"'' we'll all be dead.
*[[File:NuKeynesPix.png]] [[Keynesian School#Neo-Keynesian Economic Theory|Neo Keynesian Economics]] - You are my son and I love you but quite hanging out with those [[File:Neoclassical.png]] [[Classical Liberalism|neoclassicals]]!
*[[File:Demsocstar.png]] [[Democratic Socialism]] - Normally a good ally, can get carried away at times though.
*[[File:Neoliberal-icon.png]] [[Neoliberalism]] - I like you depending on your mood, my dear son. <s>Though I'm still a bit pissed at how much you tried to undo my work even though I became a failure over time</s>
*[[File:Protect.png]] [[Protectionism]] - Protectionism is good but cant you import a bit more things?
*[[File:Merc.png]] [[Mercantilism]] - I learned a lot from him, but he's a bit too blunt when it comes to violence.
*[[File:corptism.png]] [[Corporatism]] - I took many ideas from you, but your idea of abolishing democracy is preposterous.
*[[File:Synd.png]] [[Syndicalism]] - Stop complaining about wages already! Go on welfare you lazy, good-for-nothing commies! <s>You know what? That was a bit too harsh of me,</s> I'll let your unions strike, as long as you are not being violent.
*[[File:Socliber.png]] [[Social Libertarianism]] - I don't think you understand the business cycle, but at least you're fine with the FED.
*[[File:Chilib.png]] [[Chicago School]] - While I mostly disagree with him on Fiscal vs Monetary Policy, we both support Central Banking, Fiat Currency and Capitalism. Just wish you'd open up to Government Spending more...


*[[File: Soclib.png]] [[Social Liberalism]] - He's a good student, and we tend to agree on civil liberties issues but I wish that he was somewhat more of an interventionist.
===Enemies===
*[[File: Patcon.png]] [[Paternalistic Conservatism]] - You listened to my arguments and not [[File: Fiscon.png]] [[Fiscal Conservatism|his]], smart move.
*[[File:FreeSoci.png]] [[Communism (Disambiguation)|Communism]] - I am not a communist. On the contrary, my methods are the only way to stop communists!
*[[File: Socdem.png]] [[Social Democracy]] - I justify for him whatever he is doing.
**[[File:FreeSoci.png]] - Communist? Bro, you are a Capitalist, who said you are one of us?
*[[File: Indust.png]] [[Industrialism]] - I helped him grow after WW2.
***[[File:Keynes.png]] - [[File:Misestard.png]] {{Colorlink|Red|Austrian School|THIS PRICK!!!!}}
*[[File: Regulationism.png]] [[Regulationism]] - I'm literally the same as him, but with more specific end goals and more precise rhetoric from some British chap named John!
*[[File:Bernst.png]] [[Reformist Marxism]] - My old rival in the [[File:UKLab.png]] Labour party!
*[[File: Bankocracy.png]] [[Bankocracy]] - We need a strong central bank.
*[[File:Libertarian.png]] [[Libertarianism]] - This simpleton doesn't like it when the machine goes BRRRR. And for the last time, I'm not a goddamn socialist just because I like government spending. Please understand already that socialism is not about the government doing things.
*[[File:Minarchist.png]] [[Minarchism]] - The country is in debt and you bought war bonds but I still got paid sucker!
*[[File:Ancapf.png]] [[Anarcho-Capitalism]] - Oh Christ... you're somehow way more idiotic than [[File:Lolbert.png]][[File:Minarcuck.png]] those dorks lol.
*[[File:Fiscon.png]] [[Fiscal Conservatism]] - The machine will go BRRRR whether you like it or not!
*[[File:Austrobert.png]] [[Austrian School]] - Goldbug Detected, Opinion Invalid.
* [[File:Illeg.png]] [[Illegalism]] - Anti-economy, hates state monopolies and order? Nightmare!


===Frenemies===
==Gallery==
===Portraits===
<gallery widths="185">
Keynesssss.png
</gallery>


*[[File: Hayek.png]]  [[Hayekism]] - In the long term we'll all be dead.
====Alternative designs====
*[[File: Neoliberal-icon.png]] [[Neoliberalism]] - I like you depending on your mood, my dear son. <s>Though I'm still a bit pissed at how much you tried to undo my work.</s>
<gallery widths="185">
*[[File: Protect.png]] [[Protectionism]] - Protectionism is good but cant you import a bit more things?
Neo-Keynesianism-1.png|Neo-Keynesianism
*[[File: Merc.png]] [[Mercantilism]] - I learned a lot from him but he's a bit too blunt when it comes to violence.
Nukeynes COA.svg|Neo-Keynesian School COA
*[[File: corptism.png]] [[Corporatism]] - I took many ideas from you but your idea of abolishing democracy is preposterous.
</gallery>
*[[File: Synd.png]] [[Syndicalism]] - Stop complaining about wages already! Go on welfare you lazy, good-for-nothing commies! <s>You know what? That was a bit too harsh of me,</s> I'll let your unions strike, as long as you are not being violent.
*[[File:Socliber.png]] [[Social Libertarianism]] - I don't think you understand the business cycle, but at least you're fine with the FED.
*[[File:3way.png]] [[Third Way]] - Same as soclib, but too willing to compromise with Chicago Economics.
*[[File:Chilib.png]] [[Chicagoan Libertarianism]] - While I mostly disagree with him on Fiscal vs Monetary Policy, we both support Central Banking, Fiat Currency and Capitalism. Just wish you'd open up to Government Spending more...


=== Enemies===
===Comics and Artwork===
 
<gallery mode="slideshow">
*[[File: Commie.png]] [[Communism]] - I am not a communist, on the contrary, my methods are the only way to stop communists!
Bruno-Radical-BrokenWindow.png|Credit: u/bruno-radical, [https://www.reddit.com/r/Polcompball/comments/gqr2lh/broken_wndown_fallacy/ Source]
*[[File: Libertarian.png]] [[Libertarianism]] - This simpleton doesn't like it when the machine goes BRRRR. And for the last time, I'm not a goddamn socialist just because I like government spending.
DengKeynes.png|Credit: [[File:Ktech-icon.png]] [[User:Konlord 44|K-Tech]], [https://www.reddit.com/r/Polcompball/comments/g8yfxc/fuck_it_one_struggle/ Source]
*[[File: Minarchist.png]] [[Minarchism]] - The country is in debt and you bought war bonds but I still got paid sucker!
LARPchain.png|Credit: [[File:Ktech-icon.png]] [[User:Konlord 44|K-Tech]], [https://www.reddit.com/r/Polcompball/comments/iel6dk/it_was_always_larping/ Source]
*[[File:Ancapf.png]] [[Anarcho-Capitalism]] - Oh Christ... They're way more retarded than [[File: Libertarian.png]] [[Libertarianism|those dorks]].
Based and Jedpilled-Korwin.png|Credit: [[File:Mondistli.png]] [[User:Based and Jedpilled|Based and Jedpilled]], [https://www.reddit.com/r/Polcompball/comments/j6gtbj/silly_anarkiddie_sending_gays_to_the_gulag_was/ Source]
*[[File: Fiscon.png]] [[Fiscal Conservatism]] - The machine will go BRRRR whether you like it or not!
8dhgiy51shu51.png|u/airpods_gang420 [https://www.reddit.com/r/Polcompball/comments/jfip9n/neolib_has_a_bit_of_a_panic_attack/ Source]
*[[File:Austrobert.png]] [[Austrolibertarianism]] - Goldbug Detected, Opinion Invalid.
Bruno-Radical-70s.png|Credit: [[Community:Bruno-radical|bruno-radical]]
Legend2T-9x9.png|Credit: [[File:Colmin.png]][[User:TheLegend2T|TheLegend2T]], [https://www.reddit.com/r/Polcompballanarchy/comments/mqcr2d/the_9x9_compass_of_famous_people/ Source]
</gallery>


==Further Information==
==Further Information==
===Literature===
===Literature===
*[https://www.files.ethz.ch/isn/125515/1366_KeynesTheoryofEmployment.pdf The General Theory of Employment, Interest and Money] by John Maynard Keynes
*[https://www.files.ethz.ch/isn/125515/1366_KeynesTheoryofEmployment.pdf The General Theory of Employment, Interest and Money] by John Maynard Keynes
*[http://static.stevereads.com/papers_to_read/krugman--the_return_of_depression_economics.pdf The Return of Depression Economics and the Crisis of 2008] by Paul Krugman
*[http://static.stevereads.com/papers_to_read/krugman--the_return_of_depression_economics.pdf The Return of Depression Economics and the Crisis of 2008] by Paul Krugman
*[https://www.amazon.com/Economic-Consequences-Peace-Maynard-Keynes/dp/1629100668/ref=tmm_pap_swatch_0?_encoding=UTF8&qid=&sr= The Economic Consequences of the Peace] by John Maynard Keynes
*[https://www.amazon.com/dp/1629100668/ The Economic Consequences of the Peace] by John Maynard Keynes
*[https://www.amazon.com/Price-Peace-Democracy-Maynard-Keynes/dp/0525509038/ref=sr_1_2?crid=45SRCYHEU7Q&dchild=1&keywords=keynesian+economics&qid=1593493458&sprefix=keynesian%2Caps%2C189&sr=8-2 The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes] by Zachary D. Carter
*[https://www.amazon.com/dp/0525509038/ The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes] by Zachary D. Carter
*[https://en.wikipedia.org/wiki/The_Conscience_of_a_Liberal The Conscience of a Liberal] by Paul Krugman
*[https://www.amazon.com//dp/0393333132 The Conscience of a Liberal] by Paul Krugman
*[https://www.questia.com/library/economics-and-business/economics/schools-of-economics/keynesian-economics Questia List]
*[https://www.questia.com/library/economics-and-business/economics/schools-of-economics/keynesian-economics Questia List]


=== Wikipedia===
===Wikipedia===
 
*[[w:Keynesian_economics|Keynesian Economics]]
*[https://en.wikipedia.org/wiki/Keynesian_economics Keynesian Economics]
*[[w:Neoclassical_synthesis|Neo-Keynesianism]]
*[https://en.wikipedia.org/wiki/Neoclassical_synthesis Neo-Keynesianism]
*[[w:New_Keynesian_economics|New Keynesianism]]
*[https://en.wikipedia.org/wiki/New_Keynesian_economics New Keynesianism]
*[[w:Post-Keynesian_economics|Post-Keynesian economics]]
*[https://en.wikipedia.org/wiki/Post-Keynesian_economics Post-Keynesian economics]
*[[w:Keynesian_cross|Keynesian Cross]]
*[https://en.wikipedia.org/wiki/Keynesian_cross Keynesian Cross]
*[[w:Military_Keynesianism|Military Keynesianism]]
*[https://en.wikipedia.org/wiki/Military_Keynesianism Military Keynesianism]
*[[w:Keynes%27s_theory_of_wages_and_prices|Keynes' theory of wages and prices]]
*[https://en.wikipedia.org/wiki/Keynes%27s_theory_of_wages_and_prices Keynes' theory of wages and prices]
*[[w:Keynesian_beauty_contest|Keynesian beauty contest]]
*[https://en.wikipedia.org/wiki/Keynesian_beauty_contest Keynesian beauty contest]
*[[w:Keynesian_Revolution|Keynesian Revolution]]
*[https://en.wikipedia.org/wiki/Keynesian_Revolution Keynesian Revolution]
*[[w:2008-2009_Keynesian_resurgence|2008-2009 Keynesian resurgence]]
*[https://en.wikipedia.org/wiki/2008%E2%80%932009_Keynesian_resurgence 2008–2009 Keynesian resurgence]
*[[w:Category:Keynesian_economics|Category:Keynesian Economics]]
*[https://en.wikipedia.org/wiki/Category:Keynesian_economics Category:Keynesian Economics]


====People====
====People====
*[[File:Keynes.png]] [[w:John_Maynard_Keynes|John Maynard Keynes]]
*[[File:Keynes.png]] [[w:John_Maynard_Keynes|John Maynard Keynes]]
* [[File:Postkeynes.png]] [[w:Hyman_Minsky|Hyman Minsky]]
*[[File:Postkeynes.png]] [[w:Hyman_Minsky|Hyman Minsky]]
* [[File:Postkeynes.png]] [[w:Joan_Robinson|Joan Robinson]]
*[[File:Postkeynes.png]] [[w:Joan_Robinson|Joan Robinson]]
* [[File:Postkeynes.png]] [[w:Michał_Kalecki|Michał Kalecki]] [[File:Neomarx.png]]
*[[File:Postkeynes.png]] [[w:Michał_Kalecki|Michał Kalecki]] [[File:Neomarx.png]]
* [[File:NuKeynesPix.png]] [[w:Lawrence Klein|Lawrence Klein]]
*[[File:NuKeynesPix.png]] [[w:Lawrence Klein|Lawrence Klein]]
*[[File:Newkeynes.png]] [[w:Joseph Stiglitz|Joseph Stiglitz]] [[File:Georgist.png]]
*[[File:Newkeynes.png]] [[w:Joseph Stiglitz|Joseph Stiglitz]] [[File:Georgist.png]]
*[[File:NuKeynesPix.png]] [[w:Paul Samuelson|Paul Samuelson]]
*[[File:NuKeynesPix.png]] [[w:Paul Samuelson|Paul Samuelson]]
*[[File:NuKeynesPix.png]] [[w:James Tobin|James Tobin]]
*[[File:NuKeynesPix.png]] [[w:James Tobin|James Tobin]]
*[[File:Newkeynes.png]] [[w:Paul Krugman|Paul Krugman]]
*[[File:Newkeynes.png]] [[w:Paul Krugman|Paul Krugman]]
* [[File:Postkeynes.png]] [[w:John Kenneth Galbraith|John Kenneth Galbraith]]
*[[File:Postkeynes.png]] [[w:John Kenneth Galbraith|John Kenneth Galbraith]]
* [[File:NuKeynesPix.png]] [[w:John Hicks|John Hicks]]
*[[File:NuKeynesPix.png]] [[w:John Hicks|John Hicks]]
*[[File:Newkeynes.png]] [[w:Ben Bernanke|Ben Bernanke]]
*[[File:Newkeynes.png]] [[w:Ben Bernanke|Ben Bernanke]]


===Videos===
===Videos===
*[https://www.youtube.com/watch?v=d0nERTFo-Sk Fear the Boom and Bust: Keynes vs. Hayek - The Original Economics Rap Battle] and [https://www.youtube.com/watch?v=GTQnarzmTOc Fight of the Century: Keynes vs. Hayek - Economics Rap Battle Round Two] by [https://www.youtube.com/c/EmergentOrder Emergent Order]
*[https://www.youtube.com/watch?v=d0nERTFo-Sk Fear the Boom and Bust: Keynes vs. Hayek - The Original Economics Rap Battle] and [https://www.youtube.com/watch?v=GTQnarzmTOc Fight of the Century: Keynes vs. Hayek - Economics Rap Battle Round Two] by [https://www.youtube.com/c/EmergentOrder Emergent Order]


===Articles===
===Articles===
[http://socialdemocracy21stcentury.blogspot.com/2010/07/three-varieties-of-keynesianism.html Neoclassical Synthesis Keynesianism, New Keynesianism and Post Keynesianism: A Review]
*[http://socialdemocracy21stcentury.blogspot.com/2010/07/three-varieties-of-keynesianism.html Neoclassical Synthesis Keynesianism, New Keynesianism and Post Keynesianism: A Review]
 
===Notes===
{{Reflist|group=Note}}


===Gallery===
===References===
<gallery widths="185">
<references/>
Bruno-Radical-BrokenWindow.png|Credit: u/bruno-radical, [https://www.reddit.com/r/Polcompball/comments/gqr2lh/broken_wndown_fallacy/ Source]
DengKeynes.png|Credit: K-Tech, [https://www.reddit.com/r/Polcompball/comments/g8yfxc/fuck_it_one_struggle/ Source]
LARPchain.png|Credit: K-Tech, [https://www.reddit.com/r/Polcompball/comments/iel6dk/it_was_always_larping/ Source]
Based and Jedpilled-Korwin.png|Credit: u/Based_and_Jedpilled, [https://www.reddit.com/r/Polcompball/comments/j6gtbj/silly_anarkiddie_sending_gays_to_the_gulag_was/ Source]
Bruno-Radical-70s.png|Credit: [[bruno-radical]]
Legend2T-9x9.png|Credit: [[File:Colmin.png]][[TheLegend2T]], [https://www.reddit.com/r/Polcompballanarchy/comments/mqcr2d/the_9x9_compass_of_famous_people/ Source]
8dhgiy51shu51.png|u/airpods_gang420 [https://www.reddit.com/r/Polcompball/comments/jfip9n/neolib_has_a_bit_of_a_panic_attack/ Source]
Keynesssss.png
File:Neo-Keynesianism-1.png|Neo-Keynesianism
</gallery>


===Navigation===
==Navigation==
{{Centrist}}
{{Navbox/Centrists}}
{{Welfare}}
{{Navbox/Welfareists}}
{{Caps}}
{{Navbox/Capitalists}}


[[Category:Canon ideologies]]
[[Category:Economic Systems]]
[[Category:Economic Systems]]
[[Category:Status Quo]]
[[Category:Status Quo]]

Latest revision as of 20:46, 20 November 2023

The Keynesian School is an economically centrist ideology, whose general economic theory was pretty popular back in the day and still is in most of western countries and Japan. He believes that the state should intervene in the economy to level out the economic cycle so businesses can make long-term investments and allow for long-run growth. He plans to do this by lowering taxes, lowering interest rates, and increasing spending when the economy busts, but also by cutting spending, raising interest rates, and raising taxes during economic booms.

History

Keynesian economics was developed by the British economist John Maynard Keynes during the 1930s in an attempt to understand the Great Depression.

Variants

Neo-Keynesian Economics

The Neo-Keynesian Economic Theory is an economically centrist economic system, whose general economic theory is derived from the Neo-Classical economic thought in a mix with Keynesian economics.

A group of economists sought to synthesize the work of Keynes with numerous aspects of the neoclassical economic orthodoxy, this came to be known as the Neoclassical synthesis. This framework largely retained neoclassical analysis with regards to microeconomics and analysis on the level of the individual and/or the firm, while incorporating Keynesian analysis with regards to macroeconomics. This school of thought was dominant from the 1950s to the 1970s. Neo-Keynesianism fell out of favor due to the stagflation of the 1970s and the work of monetarists such as Milton Friedman.

The two most prominent economic models with roots in Neo-Keynesian thought are:

  • IS-LM model: It relates aggregate demand and employment to three exogenous quantities, i.e. the amount of money in circulation, the government budget, and the state of business expectations. It became really popular as a way to analyze the effect demand shocks on the overall economy
  • Phillips curve : This curve was an empirical view of analyzing, to get to the conclusion, that more inflation would cause a lower employment rate.

Post-Keynesian Economic Theory

The Post-Keynesian Economic Theory is a more left-wing current of economic thought developed from the 1930s in England and the United States, where it is currently most present, which presents itself as the closest current to Keynes' ideas. It takes the most radical views of Keynes, who throughout his life has moved further and further away from neoclassicals. As such, the Post-Keynesian economic theory takes a position radically opposed to that of neoclassical economics by emphasizing the following points:

  • A realistic and non-instrumentalist epistemology. The assumptions made by post-Keynesians must correspond to reality; they do not have a simple predictive function.
  • A holistic and non-individualistic approach, for example, the possibility of an autonomous macroeconomics compared to the microeconomics, and an area of ​​analysis and reflection specific to macroeconomics.
  • Giving up on the assumptions of absolute or even limited rationality of agents.
  • Considering the problem of scarcity in the economy as secondary; and placing the problems of production, reproduction, growth, and circulation at the center of the analysis.
  • Flavoring state interventionism over the free market.
  • Inflation is analyzed from a cost-push perspective. Money is endogenous, wages in monetary terms are determined by oligopolies and unions, and the stock of capital is homogeneous.

New Keynesian Economic Theory

The New Keynesian Economic Theory is a macroeconomic school of thought that strives to provide more consistent micro-foundations to the Keynesian economic theory in response to sustained attacks from New-Classical economists. Like the Neo-Keynesian economic theory, the New Keynesian economic theory is Keynesian in the short run but neoclassical in the long run.

However, unlike the neoclassical synthesis, the New Keynesian economic Theory attempts to provide theoretical explanations for a variety of market failures, mainly through Microeconomic Foundations and Rational Exceptions

  • Menu costs: The restaurants can print out new menus in response to their price changes, hence the name. However, menu cost is actually the cost of firms adjusting their nominal prices. The burden causes businesses to change prices slowly rather than continuously. The macroeconomic effect of changing a single firm's price on the demand of all products is called the "aggregate-demand externality."
  • The staggering of prices: According to New Keynesians, enterprises don't set prices at the exact same time. Each one cares about its price relative to the ones charged by other firms. As a result, the prices are sluggish because no firms want to be the first to increase its price significantly.
  • Coordination failure: In the real world, the number of businesses is very large, so it's hard to predict what others may do after the adjustment of the money supply. The failure of businesses to coordinate the changes in prices is a possible explanation for recessions.
  • Efficiency wages: Markets may fail to clear due to the tendency for employers to pay above equilibrium wages. Abnormally high wages cause existing workers to be more productive and thus less likely to switch to a new job.

Moreover, the New Keynesian economic theory has two models that don't appear in the last iteration of the Keynesian Scool:

  • New Keynesian DSGE model: Enterprises and households are assumed to have rational expectation, but prices are set by monopolistically competitive firms and can't shift quickly or without cost.
  • New Keynesian Phillips Curve: Like an expectations-augmented Phillips curve, it implies that the trade-off between unemployment and inflation is only applicable in the short run.

Tenets

Keynesian economics is considered a "demand-side" theory that focuses on changes in the economy over the short run. Keynes’s theory was the first to sharply separate the study of economic behavior and markets based on individual incentives from the study of broad national economic aggregate variables and constructs.

Based on his theory, Keynes advocated for increased government expenditures and lower taxes to stimulate demand and pull the global economy out of the depression. Subsequently, Keynesian economics was used to refer to the concept that optimal economic performance could be achieved—and economic slumps prevented—by influencing aggregate demand through activist stabilization and economic intervention policies by the government.

John Maynard Keynes photographed next to his wife, Lydia.

Keynesian economics represented a new way of looking at spending, output, and inflation. Previously, what Keynes dubbed classical economic thinking held that cyclical swings in employment and economic output create profit opportunities that individuals and entrepreneurs would have the incentive to pursue, and in so doing correct the imbalances in the economy. According to Keynes’s construction of this so-called classical theory, if aggregate demand in the economy fell, the resulting weakness in production and jobs would precipitate a decline in prices and wages. A lower level of inflation and wages would induce employers to make capital investments and employ more people, stimulating employment and restoring economic growth. Keynes believed that the depth and persistence of the Great Depression, however, severely tested this hypothesis.

In his book, The General Theory of Employment, Interest, and Money and other works, Keynes argued against his construction of classical theory, that during recessions business pessimism and certain characteristics of the market economies would exacerbate economic weakness and cause aggregate demand to plunge further.

For example, Keynesian economics disputes the notion held by some economists that lower wages can restore full employment because labor demand curves slope downward like any other normal demand curve. Instead, he argued that employers will not add employees to produce goods that cannot be sold because demand for their products is weak. Similarly, poor business conditions may cause companies to reduce capital investment, rather than take advantage of lower prices to invest in new plants and equipment. This would also have the effect of reducing overall expenditures and employment.e

Personality

Keynesian School is the sort of guy who you know you can ask for help on homework, but you can't really remember ever having a proper conversation. He can become a little obsessive when it comes to refining mathematical models to prove his point, and this can make him seem disconnected. 

Stylistic Notes

Keynesian School has multiple jokes about him which are displayed in his behaviors in comics:

  • He likes to break other people's windows.
  • Likes to bury money in ditches to dig it up again.
  • Big consoomer
  • Likes to have gay sex with twinks.

How to Draw

The ball design is based on the Coat of Arms of John Maynard Keynes (Specifically the Escutcheon, a.k.a. the Shield)

Coat of Arms of Keynesian School
  1. Draw a ball
  2. Fill it with blue
  3. Draw three grey diagonal lines (two thin with one thick in the middle) from top left to bottom right
  4. Draw two fleur-de-lis symbols in the bottom left and top right with the same color
  5. Draw the eyes

And you're done.

Color Name HEX RGB
Blue #105BB0 16, 91, 176
Grey #B8C1CD 184, 193, 205


Relationships

Friends

  • Social Liberalism - He's a good student who tends to agree with me on civil liberties. Just would like to see him go a bit further when it comes to economic interventionism.
  • Paternalistic Conservatism - You listened to my arguments and not his, smart move.
  • Social Democracy - I justify for him whatever he is doing.
  • Industrialism - I helped him grow after WW2.
  • Left-Wing Populism - Yes! We can afford everything, definitely! Those corporate bailouts are necessary though
  • Regulationism - I'm literally the same as him, but with more specific end goals and more precise rhetoric from some British chap named John!
  • Neoprogressive Hawkism - Couldn't care less for social progress but the welfare and military spending are nice
  • Neoconservatism - Military spending is a great way to help the economy!
  • Liberal Hawkism - A militarist social liberal? Even better.
  • Militant Social Democracy - A militarist social democrat? How do these consistently become better and better?
  • Financialism - We need a strong central bank.
  • Georgism - Both Stiglitz and Krugman like your idea of a Land Value Tax. Not sure it should replace all other taxes though.

Frenemies

  • Hayekism - "In the long term" we'll all be dead.
  • Neo Keynesian Economics - You are my son and I love you but quite hanging out with those neoclassicals!
  • Democratic Socialism - Normally a good ally, can get carried away at times though.
  • Neoliberalism - I like you depending on your mood, my dear son. Though I'm still a bit pissed at how much you tried to undo my work even though I became a failure over time
  • Protectionism - Protectionism is good but cant you import a bit more things?
  • Mercantilism - I learned a lot from him, but he's a bit too blunt when it comes to violence.
  • Corporatism - I took many ideas from you, but your idea of abolishing democracy is preposterous.
  • Syndicalism - Stop complaining about wages already! Go on welfare you lazy, good-for-nothing commies! You know what? That was a bit too harsh of me, I'll let your unions strike, as long as you are not being violent.
  • Social Libertarianism - I don't think you understand the business cycle, but at least you're fine with the FED.
  • Chicago School - While I mostly disagree with him on Fiscal vs Monetary Policy, we both support Central Banking, Fiat Currency and Capitalism. Just wish you'd open up to Government Spending more...

Enemies

  • Communism - I am not a communist. On the contrary, my methods are the only way to stop communists!
    • - Communist? Bro, you are a Capitalist, who said you are one of us?
  • Reformist Marxism - My old rival in the Labour party!
  • Libertarianism - This simpleton doesn't like it when the machine goes BRRRR. And for the last time, I'm not a goddamn socialist just because I like government spending. Please understand already that socialism is not about the government doing things.
  • Minarchism - The country is in debt and you bought war bonds but I still got paid sucker!
  • Anarcho-Capitalism - Oh Christ... you're somehow way more idiotic than those dorks lol.
  • Fiscal Conservatism - The machine will go BRRRR whether you like it or not!
  • Austrian School - Goldbug Detected, Opinion Invalid.
  • Illegalism - Anti-economy, hates state monopolies and order? Nightmare!

Gallery

Portraits

Alternative designs

  • Neo-Keynesianism

    Neo-Keynesianism

  • Neo-Keynesian School COA

    Neo-Keynesian School COA

Comics and Artwork

Further Information

Literature

Wikipedia

People

Videos

Articles

Notes

References


Navigation

Retrieved from "https://pcbwiki.net/index.php?title=Keynesian_School&oldid=449807"