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We will consider these two claims in turn, and then see how they are represented in the AD/AS model. The first building block of the Keynesian diagnosis is that recessions occur when the level of demand for goods and services is less than what is produced when labor is fully employed.
The theoretical apparatus of supply and demand curves developed by Fleeming Jenkin and Alfred Marshall provided a unified mathematical basis for this approach, which the Lausanne School generalized to general equilibrium theory.
Unit 1 Basic economics concepts. Unit 2 Economic indicators and the business cycle. Unit 3 National income and price determination. Unit 4 Financial sector. Unit 5 Long-run consequences of stabilization policies. Unit 6 Open economy: international trade and finance. Unit 7 Keynesian approaches and IS-LM.
Keynesian economics. Risks of Keynesian thinking. Macroeconomic perspectives on demand and supply. Keynes’ Law and Say’s Law in the AD/AS model. Aggregate demand in Keynesian analysis. The building blocks of Keynesian analysis. The Phillips curve in the Keynesian perspective.
16 Αυγ 2024 · General equilibrium theory, or Walrasian general equilibrium, attempts to explain the functioning of the macroeconomy as a whole, rather than as collections of individual market phenomena.
