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Keynesian, New Keynesian and New Classical Economics

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  • Greenwald, B
  • Stiglitz, Joseph E

Abstract

Formal developments of the Keynes's General Theory, while attempting to achieve a new classical synthesis of the realities of observed macroeconomic fluctuation and unemployment with classical microeconomics, have come to be surprisingly closely tied to the old classical models. Keynes's insights have been reduced largely to an assumption of nominal price rigidities. In fact, Keynes's original qualitative approach contained a much richer description of economic reality. This paper describes how fully rational microeconomic models incorporating imperfect information and incomplete markets, very much in the Keynesian tradition, imply macroeconomic behavior that encompasses most of the qualitative insights of the General Theory. Copyright 1987 by Royal Economic Society.

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  • Greenwald, B & Stiglitz, Joseph E, 1987. "Keynesian, New Keynesian and New Classical Economics," Oxford Economic Papers, Oxford University Press, vol. 39(1), pages 119-133, March.
  • Handle: RePEc:oup:oxecpp:v:39:y:1987:i:1:p:119-33
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    4. Riccardo Fiorentini & Roberto Tamborini, 2002. "Monetary Policy, Credit and Aggregate Supply: The Evidence from Italy," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 31(3), pages 451-491, November.
    5. Miglierina Enrico & Molho Elena, 2002. "Well-posedness and convexity in vector optimization," Economics and Quantitative Methods qf0221, Department of Economics, University of Insubria.
    6. Riccardo Fiorentini & Roberto Tamborini, 2001. "The Monetary Transmission Mechanism in Italy: The Credit Channel and a Missing Ring," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 60(1), pages 1-42, June.
    7. Abigail N. Devereaux & Richard E. Wagner, 2020. "Contrasting Visions for Macroeconomic Theory: DSGE and OEE," The American Economist, Sage Publications, vol. 65(1), pages 28-50, March.
    8. Alho, Kari, . "Analysis of Financial Markets and Central Bank Policy in the Flow-of-Funds Framework. An Application to the Case of Finland," ETLA A, The Research Institute of the Finnish Economy, number 12, June.
    9. Fernando Tenjo & Enrique Lopez, 2003. "Credit bubble and stagnation in Colombia, 1990-2001," Colombian Economic Journal, Academia Colombiana de Ciencias Economicas, Colegio Mayor de Nuestra Senora del Rosario, Pontificia Universidad Javeriana, Universidad de Antioquia, Universidad de los Andes, Universidad del Valle, Universidad Externado de Colombia, Universidad Nacional de Colombia, vol. 1(1), pages 151-191, December.
    10. Mehmet BÖLÜKBAÞ, 2016. "The Effects of Economic Policies in Turkey: An Application for the Period After 2000," Journal of Social and Administrative Sciences, KSP Journals, vol. 3(4), pages 315-322, December.
    11. Georgios Argitis, 2008. "Finance, Investment and Macroeconomic Performance," European Research Studies Journal, European Research Studies Journal, vol. 0(1-2), pages 71-88.
    12. Floro Ernesto Caroleo, 2004. "Fondamenti teorici della rigidità salariale nell'ambito dei non market clearing models," STUDI ECONOMICI, FrancoAngeli Editore, vol. 2004(83).
    13. Mr. Robert P Flood & Mr. Michael Mussa, 1994. "Issues Concerning Nominal Anchors for Monetary Policy," IMF Working Papers 1994/061, International Monetary Fund.
    14. Roberto Tamborini, 2010. "Monetary Policy With Investment–Saving Imbalances," Metroeconomica, Wiley Blackwell, vol. 61(3), pages 473-509, July.
    15. J. Barkley Rosser, 2003. "A Nobel Prize for Asymmetric Information: The economic contributions of George Akerlof, Michael Spence and Joseph Stiglitz," Review of Political Economy, Taylor & Francis Journals, vol. 15(1), pages 3-21.
    16. Bertocco Giancarlo, 2004. "Are banks really special? A note on the theory of financial intermediaries," Economics and Quantitative Methods qf04021, Department of Economics, University of Insubria.
    17. Yuli Radev, 2016. "Dynamic disequilibrium and investment - saving imbalance," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 126-149.
    18. Meyer, Bernd & Ahlert, Gerd, 2019. "Imperfect Markets and the Properties of Macro-economic-environmental Models as Tools for Policy Evaluation," Ecological Economics, Elsevier, vol. 155(C), pages 80-87.
    19. Guerrazzi, Marco & Meccheri, Nicola, 2012. "From wage rigidity to labour market institution rigidity: A turning-point in explaining unemployment?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(2), pages 189-197.
    20. Roberto Tamborini, 1997. "A macroeconomic model of bankruptcy," CEEL Working Papers 9702, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
    21. Andaluz-Alcazar, Alvaro, 2012. "Choix d'investissement sous incertitude des gestionnaires des réseaux de distribution (GRD) en Europe à l'horizon 2030," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/10862 edited by Keppler, Jan Horst, October.
    22. Joseph E. Stiglitz, 1988. "Money, Credit, and Business Fluctuations," The Economic Record, The Economic Society of Australia, vol. 64(4), pages 307-322, December.
    23. Georg Winckler, 1988. "Neustrukturierung der keynesianischen Theorie?," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 14(2), pages 183-196.
    24. Roger Backhouse & Mauro Boianovsky, 2005. "Disequilibrium Macroeconomics: An Episode In The Transformation Of Modern Macroeconomics," Anais do XXXIII Encontro Nacional de Economia [Proceedings of the 33rd Brazilian Economics Meeting] 012, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].

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