Economics Questions

Re: Economics Schools

Individualist — Fri, 03 Jul 2009 22:20:38 GMT

*bump*

Re: Economics Schools

Individualist — Fri, 03 Jul 2009 00:25:36 GMT

ladyattis:

No, Neo-Classical economics precedes Keynesian economics in terms of historical origins. Keynesianism is a kind of Neo-Classical conceptions, but the whole of the Neo-Classical school is a big honkin' complex of other theories. Some theories have been rejected in terms of the Neo-Classical/Keynesian Synthesis (such as the subjective theory of value, theories of entrepreneurship, and the like). But on the whole, it's not very honest to assume it's a monolithic school, even if it's taught in this manner by Keynesian 'scholars.'

If Keynesianism rejects the subjective theory of value, what does it replace it with?

Re: Economics Schools

hayekianxyz — Thu, 02 Jul 2009 16:32:03 GMT

MatthewWilliam:

Giles, can you recommend a good book I can read about all this?

Not really, I struggled to understand the differences for a while when I began learning economics. Reading Boettke's blog will give you a good idea of where Austrianism stands as regards the rest of economic theory, Salerno has some good blog posts/ articles as far Austrian economics and neoclassicism goes.

However, Garrison's Time and Money was probably the best source of this sort of information that I've read.

Re: Economics Schools

MatthewWilliam — Thu, 02 Jul 2009 16:22:49 GMT

Giles, can you recommend a good book I can read about all this?

Re: Economics Schools

hayekianxyz — Wed, 01 Jul 2009 12:49:19 GMT

Neoclassical economics is a microeconomic school of thought, whereas Keynesian economics is concerned with macro. Paul Samuelson attempted to reconcile the two schools and this resulted in what is now known as the neoclassical synthesis. In spite of this, there were still tensions between the neoclassical foundations and the Keynesian macroeconomics (e.g. neoclassical microeconomic theory focused on "rational" behaviour, whereas Keynes' claimed that wages would not fall because workers would irrationally reject reductions in real wages), new classical economics criticised this and New Keynesian economics is the attempt on behalf of Keynesians to answer these criticisms and in doing so provide the microfoundations of macroeconomic analysis (for example, efficiency wages provided a way that real wages may be kept above the market clearing rate whilst staying true to "rational" behaviour).

Also, keep in mind that Keynesian economics is largely out of fashion these days, you'll learn it as an UG student, but that's largely because it's relatively easy to teach. In academia it doesn't hold much sway.

One more point, Austrian economics is technically a neoclassical school of economics, people like Walter Block pretend it isn't and as such fall into error. Put briefly, the point of neoclassical economics, originating from the marginal revolution (Jevons, Menger and Walras) was to explain price formation in terms of the subjective preferences of individual actors regarding marginal units of economic goods. In this regard Austrian economics is not an heterodox school of economics, only in terms of methodology could Austrianism be considered heterodox. Compare Austrian theory with that of Marxian or Classical economics and you'll see why Austrian economics is a neoclassical school. In terms of price theory there is a far greater affinity between Chicago price theory and Austrian price theory. The problem is that due to the backgrounds of Walras and Jevons, the marginal revolution was hijacked by formalists and positivists, and as such modern mainstream economics have had a far more difficult time explaining what they purport to that Austrians have with the use of verbal logic. That's why I'd say Austrian economics is far more true to neoclassical economics than mainstream economics.

Re: Economics Schools

nirgrahamUK — Wed, 01 Jul 2009 00:04:46 GMT

my bad, im in the habit of assuming that people are just saying Neoclassical when they are referrencing the neoclassical synthesis. ladyattis for the win.

Re: Economics Schools

ladyattis — Tue, 30 Jun 2009 23:58:26 GMT

No, Neo-Classical economics precedes Keynesian economics in terms of historical origins. Keynesianism is a kind of Neo-Classical conceptions, but the whole of the Neo-Classical school is a big honkin' complex of other theories. Some theories have been rejected in terms of the Neo-Classical/Keynesian Synthesis (such as the subjective theory of value, theories of entrepreneurship, and the like). But on the whole, it's not very honest to assume it's a monolithic school, even if it's taught in this manner by Keynesian 'scholars.'

Re: Economics Schools

nirgrahamUK — Tue, 30 Jun 2009 23:52:47 GMT

the neo-classical is neo in that its a synthesis between classical and keynesianism and some other stuff too. so keynesianism is in there.

Economics Schools

Individualist — Tue, 30 Jun 2009 23:49:47 GMT

Joseph Salerno says that the neo-classical school of economists is different from the Keynesian school. This is also what Wikipedia said. Why does the Mises.org "Are You an Austrian?" quiz equate the neo-classical school with the Keynesian one?