Thus, in a "full unemployment" situation, it would be advisable and feasible to undertake Keynesian
demand policies; though, Hayek points out that as soon as this situation of "abundance" ended, such policies would again be extremely dangerous.
Are the Keynesians
convinced that oil will soon reach $150 per barrel?
And so the False Keynesians
went home--Romer back to Berkeley, Summers to Harvard.
These New Keynesians
accepted the methodological dictums of the New Classical economics: that constrained maximization of profit and utility functions is the appropriate microfoundation for macroeconomics.
and monetarist theories dominate macro-economics in general and balance of payments theories in particular.
Although the authors do not say it this way, the fundamental difference between the New Keynesian
literature and the New Monetarist literature they describe is that the New Keynesians
write for the policymaker who needs answers today and the New Monetarists include almost everyone doing basic research on monetary theory.
policies, however, resort to fiscal policy and not only to monetary policy.
The other way they could have bolstered their economies, at a time when their banks and businesses were reeling and had no capacity to invest, was to follow the Keynesian
course of having their governments invest more by enacting a stimulus, as our government did at the outset of Barack Obama's presidency.
spent the 1960s congratulating each other, not everyone had jumped onto the Phillips Curve bandwagon.
argue for increased government spending.
Moreover, the roots of the financial and economic crisis are exactly the opposite of what Keynesians
explanation is that we're still recovering from the financial panic, though it's worth recalling that in January 2010 the Fed predicted that growth in 2012 would be 3.