Macroeconomics in the Twenty-First Century: Keynes Vis-à-Vis the Others

Byasdeb Dasgupta

A chapter in Business, Management and Economics Annual Volume 2024 from IntechOpen

Abstract: The paper is an attempt to review the major macroeconomic theories which were applied in macroeconomic policies to serve the purpose of different macroeconomic regimes from time to time since 1930s. We traced out a historical journey of the three main macroeconomic theories, namely Keynesian, Monetarism and New Classical (which includes the Rational Expectation School), to see how theories underwent changes or how paradigm shifts in the macroeconomic theories occurred with the change or transformation in the macroeconomic regimes since 1930s. The macro problems which were relevant in the days of Keynes became more complex and complicated with the turn of macro events in the 1970s, when stagflation became a real issue. Keynes was replaced by the new policy regime in the 1970s which followed the Monetarist and New Classical ideas to a large extent. The end of the twentieth century was earmarked by the inception of the neoliberal macro policies, which differed significantly from Keynes and went well with Monetarism and the New Classical School. However, the periodic recurrence of crisis continued in the free market economy. The beginning decade of the twenty-first century saw a severe global crisis almost of the level of the Great Depression of the 1930s. Today apart from employment generation, containment of inflation and augmentation of real output, speculative financial growth is playing havoc for the policymakers as none of these three major macro schools of thought can effectively tackle all the macro problems of our time.

Keywords: Keynes; monetarism; new classical macroeconomic theory; rational expectations school; financialization (search for similar items in EconPapers)
JEL-codes: M00 M2 (search for similar items in EconPapers)
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.intechopen.com/chapters/89340 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ito:pchaps:328686

DOI: 10.5772/intechopen.114903

Access Statistics for this chapter

More chapters in Chapters from IntechOpen
Bibliographic data for series maintained by Slobodan Momcilovic ().