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Economists never get together at conventions to standardize names, but in the vernacular there is a family relationship between the "neoclassical synthesis," "neo-Keynesianism," and "new Keynesianism." The "neoclassical synthesis" arose after World War II, with Paul Samuelson: the idea was that the government and the central bank would maintain rough full employment, so that neoclassical notions -- centered on the axiom of the universality of scarcity -- would apply.
Led by economists such as James Tobin and Franco Modigliani, neo-Keynesianism is based on the synthesis but puts more emphasis on microfoundations, the use of Walrasian general equilibrium theory in macroeconomics. This developed over time. It is often contrasted with the post-Keynesianism of Paul Davidson , et al., which emphasizes the role of fundamental uncertainty in economic life, especially concerning issues of private fixed investmentFixed investment in economics refers to an increase in the amounts of real capital goods (real means of production) used in production or to the replacement of depreciated capital goods. Thus, fixed investment would increase the amount of factories, machi.
New Keynesianism, associated with Gregory Mankiw, currently chair of the Council of Economic Advisors under President George W. BushGeorge Walker Bush (born July 6, 1946) is the 43rd and current President of the United States. His first four-year term as President began on January 20, 2001 following the controversial U. presidential election, 2000, where for the first time in American, is a response to the Robert LucasRobert Lucas ( April 1, 1781 February 7, 1853) was the 12th governor of Ohio from 1832 to 1836. He was also the chairman of the first Democratic national convention and the first territorial governor of Iowa from 1838 to 1841. Lucas had attained the rank and the new classical school. That school criticized the inconsistencies of the neo-Keynesian school in light of the concept of " rational expectations." The new classicals combined a unique market-clearingIn economics, market clearing refers to either # a simplifying assumption made by the new classical school that markets always go to where the quantity supplied equals the quantity demanded; or # the process of getting there via price adjustment. The core equilibrium (at full employment) with rational expectations. The New Keynesians say: we have "microfoundations" that indicate that markets do not clear because of price stickiness. Thus, there is no unique equilibrium in the short run. Thus, the rational expectations-based critique doesn't apply.
Whereas the neoclassical synthesis hoped that fiscal and monetary policy would maintain full employment, the new classicals assumed that price and wage adjustment would automatically attain this situation in the short run. The new Keynesians, on the other hand, see full employment as being automatically achieved only in the long run, since prices are "sticky" in the short run. Government and central-bank policies are needed because the "long run" may be very long.