To not leave anything assumed, what is the specific definition of Keynesianism? Is it specifically limited to fiscal and monetary policies?
I’m taking Microeconomics through a SUNY school. Our textbook is written by Krugman.Is it safe to say that everything in it is Keynesian, or is there a place where Keynesianism starts and ends? Are there areas in which all economists agree?Am I safe to assume that “textbook” and Keynesian economics are interchangeable?
For example, if they are basically the same, why do we have classes on both Keynes and his fallacies and what’s wrong with textbook economics?
How much trouble am I likely to run into by referring to Sowell, Hazlitt, Friedman, Hayek, Mises, etc in issues outside of fiscal, monetary, regulatory, monopoly theory, etc?
I’m hoping that listening to the lectures for this course that coordinate with my studies will help me get an accurate understanding while learning both perspectives.
Keynesian economics is, strictly speaking, a macroeconomic theory or model. Such models attempt to explain economics growth and business cycles. Neoclassical economics is, strictly speaking, a set of microeconomic theories or models. Such models attempt to explain the allocation of resources in society to particular needs. Roughly speaking, all policy issues except fiscal and monetary policy fall under microeconomics and can be addressed without any reference to Keynesianism, for example, the impact of agricultural price supports or the consequences of state-run schools. The material in textbooks (including Krugman’s), therefore, is divided into micro and macro sections in order to cover the entire ground of economic theory
These waters are muddied somewhat by the so-called neoclassical synthesis which attempts to ground Keynesian macro in neoclassical micro.