Difference between revisions of "Macroeconomics activity and demand/Short run instability"

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Currently the two main competing economic schools of thought are Keynesian and Supply-Side (sometimes called "trickle down") economics.  
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|body=[http://www.newworldencyclopedia.org/entry/Keynesian_economics#Keynes_and_classical_economics New World Encyclopedia: "Keynes and Classical Economics"]
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* Read this article for more information about these competing perspectives. This section contains four subsections: "Wages and Spending,” "Excessive Saving and Interest Rates,” "Active Fiscal Policy,” and "Multiplier Effect.” Focus your attention on the portions within the four subsections that emphasize the short-run. You may observe that the differences among the various subsections tend to deal with the underlying nature of change.}}
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==Keynesian==
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[[File:Keynes 1933.jpg|thumb|Keynes 1933]]
  
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===Demand-side theories===
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Read this article on http://www.wikiwand.com/en/Keynesian_economics Wikipedia: "Keynesian Economics", which covers several aspects of contemporary macroeconomic thinking. Note the emphasis on managing aggregate demand by changing variables that can alter aggregate expenditures. Some economists argue it is easier and better to prompt changes in consumption, investment, government spending, and net exports than to prompt changes in variables that affect aggregate supply.
  
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* Read this article, which covers several aspects of contemporary macroeconomic thinking. Note the emphasis on managing aggregate demand by changing variables that can alter aggregate expenditures. Some economists argue it is easier and better to prompt changes in consumption, investment, government spending, and net exports than to prompt changes in variables that affect aggregate supply.}}
 
  
  
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===Supply-side theories===
 
  
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|body=[http://www.wikiwand.com/en/Supply-side_economics Wikipedia: "Supply Side Economics"]
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* Read this article, which covers several aspects of contemporary macroeconomic thinking. Note the emphasis on managing aggregate supply by changing variables including tax rates, deregulating industries, providing incentives for employers to hire workers, and so forth. Some economists argue it is easier and better to prompt changes in the supply side than to prompt changes in variables that affect aggregate demand.}}
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==Supply-Side==
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[[File:Rmundell.jpg|thumb|right|Robert Mundell: a key proponent of Supply-Side]] [[File:Artur Laffer.jpg|thumb|right|Arthur Laffer: a key proponent of Supply-Side]]
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Read this article from Wikipedia about [http://www.wikiwand.com/en/Keynesian_economics "Keynesian Economics"], which covers several aspects of contemporary macroeconomic thinking. Note the emphasis on managing aggregate supply by changing variables including tax rates, deregulating industries, providing incentives for employers to hire workers, and so forth. Some economists argue it is easier and better to prompt changes in the supply side than to prompt changes in variables that affect aggregate demand.}}
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Having read these two articles, take a moment to write down your thinking on these two approaches to economic thought and, ultimately, economic policy in a WeNotes post.
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{{#widget:WEnotesPost|tag=maec101|button=Post comment|leftmargin=0}}

Latest revision as of 23:50, 4 August 2017

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Supply vs Demand

Currently the two main competing economic schools of thought are Keynesian and Supply-Side (sometimes called "trickle down") economics.

Keynesian

Keynes 1933

Read this article on http://www.wikiwand.com/en/Keynesian_economics Wikipedia: "Keynesian Economics", which covers several aspects of contemporary macroeconomic thinking. Note the emphasis on managing aggregate demand by changing variables that can alter aggregate expenditures. Some economists argue it is easier and better to prompt changes in consumption, investment, government spending, and net exports than to prompt changes in variables that affect aggregate supply.





Supply-Side

Robert Mundell: a key proponent of Supply-Side
Arthur Laffer: a key proponent of Supply-Side

Read this article from Wikipedia about "Keynesian Economics", which covers several aspects of contemporary macroeconomic thinking. Note the emphasis on managing aggregate supply by changing variables including tax rates, deregulating industries, providing incentives for employers to hire workers, and so forth. Some economists argue it is easier and better to prompt changes in the supply side than to prompt changes in variables that affect aggregate demand.



Having read these two articles, take a moment to write down your thinking on these two approaches to economic thought and, ultimately, economic policy in a WeNotes post.

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