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Classical and New Keynesian Schools of Thought

Summary:
“There are two leading explanations for the very slow recovery in the unemployment rate, and the continuing low growth of labor productivity, in the aftermath of the Great Recession. One group of classical economists clings to pre-Keynesian ideas that blame the recession on bad economic policy. The second group of New Keynesians seeks to resuscitate failed interpretations of Keynes on which the profession gave up, rightly in my view, during the 1980s. Both groups are wrong.” (Pages 12-13, Prosperity For All)

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“There are two leading explanations for the very slow recovery in the unemployment rate, and the continuing low growth of labor productivity, in the aftermath of the Great Recession. One group of classical economists clings to pre-Keynesian ideas that blame the recession on bad economic policy. The second group of New Keynesians seeks to resuscitate failed interpretations of Keynes on which the profession gave up, rightly in my view, during the 1980s. Both groups are wrong.” (Pages 12-13, Prosperity For All)

 
Roger Farmer
ROGER E. A. FARMER is a Distinguished Professor of Economics at UCLA and served as Department Chair from July 2008 through December 2012. He was the Senior Houblon-Norman Fellow at the Bank of England, January-December 2013.

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