Hence, the emergence of the neo-Keynesians
using IS-LM analysis (incorporating Keynesian macro in a neoclassical synthesis) and all the other theoretical frameworks that followed within mainstream economics.
The debate between "two Greeces" mirrors a parallel divide within economics, pitting the neoliberal direction of the Adam Smith, Friedrich Hayek and Milton Friedman tradition against the modern neo-Keynesians
such as Joseph Stiglitz, Thomas Piketty and Paul Krugman.
When I interviewed Shadow Chief Secretary to the Treasury Rachel Reeves a year ago, she responded in the affirmative when I asked her whether she would identify herself as a neo-Keynesian
do not impose cuts when a national economy is in the doldrums.
have succeeded in painting austerity as the grim policy of wresting bread crusts away from widows and orphans, but its unspun meaning is that governments must live within their means rather than fund basic programs with borrowed money.
seem to be attributing deficit spending as the cause and consequence of the existence of modern economies, which are in need of endless stimulus, with retrenchment only aeonce the economy recovers'.
In one anti-euro corner are weak-money neo-Keynesians
. Greece was their model pupil, spending its way to supposedly drive growth.
Thus, by basing their model on the transversality condition, the Neo-Keynesians
are turning their model into an essentially non-monetary model.
There have always been conservative, moderate, liberal, and radical Keynesians, and in recent years so-called neo-Keynesians
and post-Keynesians have been added to the mix.
such as Stiglitz still feel it is part of the state apparatus' responsibility to monitor and enact policies affecting both the internal and global dynamics of the political-economic environment.
According to Mankiw (1992b), a prominent Keynesian economist, at least some new or Neo-Keynesians
agree with the RBC theorists that it is important for business cycle theory to be consistent with the micro foundations of the macroeconomy.
By contrast, neo-Keynesians
hold that through the inflationary gap, changes in real income (aggregate demand) are expected to cause changes in prices.