Post-Keynesian economics and New Keynesian
3 Post-Keynesian economics
(A) Post-Keynesian economics and the basic characteristics of the formation of
1. Formation of Post-Keynesian economics
后凯恩斯派 in the New Neoclassical Synthesis controversy formed and developed.
Keynes&#39;s &quot;General Theory&quot; was published, the
Keynesian followers of the &quot;General Theory&quot; in a number of
points of view of understanding and practical issues of disagreement, indicates the
formation of two opposing schools of thought: New Neoclassical Synthesis and
Post-Keynesian economics. The former Massachusetts Institute of Technology in
Cambridge, the United States as the center, the latter centered on the University of
Cambridge. Therefore, the struggle between two factions known as the
&quot;two Cambridge battle.&quot;
2. Post-Keynesian economics theory of the basic characteristics of
Post Keynesian against the neo-classical microeconomic theory, adhere to Keynesian
macroeconomic theory, and sought to further split the two theories. Post-Keynesian
economics in the critical New Neoclassical Synthesis, while actively clarify their own
arguments. In theory, the basic characteristics of the school are:
(1) Keynes&#39;s short-term, long-term expansion of comparative static
analysis, dynamic analysis
(2) Post Keynesian objections to the new Neoclassical Synthesis method to restore the
traditional balance of Economics
(3) stress theory of income distribution
(4) the marginal productivity distribution of critical
(5) stressed the currency will lead to instability in the capitalist economy
(6) attention to normative analysis method
3. Post-Keynesian economics to the main representative
Post-Keynesian economics of the main representatives are: Joan. Robinson, Nicholas.
Kaldor, Pirro. Sraffa, lui quarter. Pasinetti et al. (B) Post-Keynesian economics theory
Post-Keynesian economics in the representation theory of value is Sraffa&#39;s
value theory. Sraffa&#39;s contribution to the theory of value, that he tried to
build originates in the classical economists and Marx&#39;s value analysis.
Ricardo and other classical economists in the works, the rest is an important concept.
Sraffa that Ricardo upheld the labor theory of value, but does not solve the problem
uniform standard of value, Marx did not solve the problem. Neoclassical school of
&quot;marginal utility&quot; to explain the concept of subjective value is
wrong, he fabricated a set of &quot;standard synthetic commodity production
system&quot;, the &quot;standard system&quot;, designed a
&quot;composite commodity&quot; to act as a measure of value that this
solves the problem of Ricardo.
From &quot;standard system&quot; that profit margins and wages can shift
in the relationship between: (P118) R is the relative value of surplus product, from
which the technological conditions of production. The higher margins, lower wages;
the other hand, is no different.
Sraffa system of equations Note: Yield depends on the technical relationship between
the production process, rather than determined by market supply and demand
interaction. However, the prices are not determined by production technology, but on
the negotiations between the capitalists and the trade unions set wages, profits rise and
Sraffa also in his theoretical system of commodity prices shows that the value of final
goods is determined by labor. Each equation in the commodity prices are determined
by the labor function. Goods by means of a combination of labor and production out.
Post-Keynesian economics that Sraffa&#39;s &quot;Restore&quot;
not only upheld the principle of Ricardo&#39;s labor theory of value, also
address the value of production from the price of Marx&#39;s
(C) Income Distribution Theory
1. On the New Neoclassical Synthesis Critical Theory of Distribution
2. Post-Keynesian economics of the distribution theory
Sraffa price for the relationship between profitability and the analysis, as well as the
standard system by the product derived &quot;same measure of value&quot;
for the Post Keynesian school of value distribution theory provides a foundation on.
(1) Robinson&#39;s theory of distribution
Robinson growth model: (P124)
(2) Kaldor&#39;s distribution theory
Kaldor model of economic growth on the share of profits in national income and
profitability of the formula is always valid, the specific expression as: (P127) and
(3) Pasinetti&#39;s theory of distribution
Pasinetti&#39;s economic growth model: (P129)
(4) Sraffa distribution theory (as already note)
(D) economic policy proposals
Post Keynesian school of economic policy proposals, is based on the theory of income
distribution. They argued that:
1. To improve the tax system first, to achieve equality of income.
2. By the Government&#39;s welfare measures to alleviate the &quot;rich
in poverty&quot; phenomenon.
3. On the investment of a comprehensive social control, to overcome the blind
economic growth, the economic and social inclusion Keynes envisaged a
&quot;long-term full employment&quot; of the track.
Four neo-Keynesians (New Keynesians)
(A) the origin of the neo-Keynesians and development
1. The original Keynesian and New Keynesian
Keynesian macroeconomics in the western area of long-term position in mainstream
economics. However, since the late 60s since the early 70s, can not explain the
stagflation of Keynesian phenomenon as being against the idea of a free economy and
its school of criticism. Keynesian theory unable to meet the challenges of reality and
hardship, from the mainstream orthodox economics, fall down on the throne.
Economic liberalism has swept the field of Macroeconomics, the Keynesian
increasingly declining. The emergence of a new Keynesian, so Keynesian came out
from the predicament.
2. New Keynesian theory of the formation of the background
New Keynesian objective conditions created, the original Keynesian theory of defects
and the new classical macroeconomics limitation in the interpretation of micro-force
lack practical problems.
Less than the original Keynesian and new classical macroeconomics progress in
theory, to the new Keynesian inspiration to useful. New Keynesian by the original
neo-classical Keynesian macroeconomics hit, learn from the Keynesian school of
their struggle against the lessons learned to form, and the new classical
macroeconomics in the struggle to the continuous development of the original
3. New Keynesian assumptions and characteristics
Non-market clearing assumption is that the most important new Keynesian hypothesis,
this hypothesis came from the original Keynesian. However, the two theories of
non-market clearing, there are significant differences. New Keynesian assumptions
(1) assumes that wages and prices are sticky, that is, not can not adjust wages and
prices, but can be adjusted, and the knowledge to adjust very slowly, to spend a very
(2) adds a new Keynesian models Keynesian model ignored the original two
assumptions: First, the principle of maximizing the economic party, and second,
New Keynesian economics is characterized by: deny neo-classical dichotomy that
economic non-Walrasian equilibrium, the actual incomplete is important.
(B) of the new Keynesian sticky price
New Keynesian sticky price theory can be divided into two categories: First, on the
nominal price stickiness; but on the actual price stickiness.
1. Stickiness of nominal prices
(1) the cost of the menu
On the menu cost literature, of which one representation theory: the menu costs and
the business cycle theory; approximate model of rational economic cycle; actual rigid
and non-neutrality of money and so on.
(2) staggered price adjustment of
Staggered adjustment theory, not a perfectly competitive market, manufacturers in
order to maximize profits, usually staggered price adjustment, not synchronous
2. Stickiness of actual price
New Keynesian sticky on the actual price, in addition to the above-mentioned
&quot;real rigidity and non-neutrality of money&quot;, there are: the
credibility of firms, the asymmetry of demand, input-output table theory, oligopoly
market and price stickiness On the.
(C) the labor market of the new Keynesian
New Keynesian labor market to overcome the Keynesian theory specified permissions,
maintaining a non-clearing labor market Keynesian doctrine. New Keynesian theory
of the labor market, the key assumption is that wage stickiness, summed up in no
more than two categories: nominal wage stickiness on; but on the real wage
1. Stickiness of nominal wages
New Keynesian sticky nominal wages on the representation theory are: staggered
wage adjustments and long-term labor contract on the theory and so on.
2. Stickiness of real wages
New Keynesian theory on the real wages are more sticky, the typical theories include:
implicit contract theory, efficiency wage theory and the Council - outsider theory.
Implied contract, implied contract of including public information and asymmetric
information theory of implied contract. Efficiency wage theory of the main contents
include the following three aspects: efficiency wages and labor market; efficiency of
the micro base salary; efficiency wages and unemployment. Lag of unemployment
also includes three aspects: pure insider&#39;s wage adjustments; have an
outsider wage pressure adjustment; unemployment persistence and wage adjustment.
(D) The new Keynesian theory of credit rationing
New Keynesian theory of credit rationing in the credit markets from asymmetric
information, this paper discusses the choice of interest rates and collateral effects of
the credit markets will lead to credit rationing, credit markets fail, government
intervention has a positive effect.
1. Selection effects of interest rates and credit rationing
Interest rates have two options, one positive choice, second choice is the reverse.
Positive selection effect of interest rates refers to the increase in interest rates can
increase the bank&#39;s earnings, it is the interest rate on bank earnings and
direct. Interest rates also have incentives for manufacturers, manufacturers can change
the attitude towards risk.
Bank using interest rates of adverse selection effect as the detection of wit, can be rare
risk identification the company level and will lend to the risk of different vendors.
Optimal bank interest rate is usually not the same when the market clearing interest
rate, so, credit market rationing. Rationing of credit markets, credit market, banks are
free choice based on the interest rate effect, for the purpose of maximizing profits, the
result of rational act, not the product of state intervention. 2. The choice of mortgage
loans and credit rationing effect
Collateral has a positive effect of selection effects and adverse selection. The former
is when there is excess demand for credit markets, the bank loans by raising the loan
collateral to increase the level of reliability, reduce the risk of bad debts to increase
bank revenue. At the same time, also inhibited the demand for loans by borrowers.
The latter is the collateral for the loan will increase the level of incremental risk of the
loans, reducing the reliability of repayment. Both banks can determine the optimal
level of collateral.
New Keynesian theory of credit rationing that market interest rates because of the
credit rationing wit and resourcefulness also work in the credit markets appear
multiple equilibrium states, where market mechanisms, through government
intervention to correct market failures.
(E) The new Keynesian policy proposals
1. New Keynesian pricing policy
The price of the new Keynesian policy recommendations aimed to suppress the price
stickiness, the price elasticity, to repair the failure of market mechanisms, stable
output. New Keynesian staggered price adjustment in the menu cost theory, theory
and put forward policy proposals are broadly similar. These two policy proposals
advocated by policy interventions to coordinate the behavior of economic man, to
correct market failure, essentially correct, but the lack of maneuverability.
2. New Keynesian employment policy
New Keynesian theory of labor wages, the micro-economics based on the
interpretation of sticky wages and unemployment, and made a number of on wage
employment policy. These policy recommendations focused on the Council - outsider
theory and other theories of staggered labor contracts.
New Keynesian employment policy still on increasing wage flexibility, reduce
unemployment, the policy idea is reasonable, but the color with strong ideals,
specifically to implement a certain degree of difficulty. For the government to dare to
labor contracts, lack of feasibility in the capitalist countries.
3. New Keynesian monetary policy and credit policy
(1) monetary policy
New Keynesians believe that in order to achieve stable output target, the government
deserve to monetary policy are: to adjust the amount of money and influence the
market price suited to the actual disturbance, and disturbance caused by price
movements in the name of the reverse acting. However, these two policies have
different effects on employees, the former means that output stability, the
employee&#39;s wages is not stable, which means that output stability, stable
(2) credit policy
New Keynesian credit policy advice: the government starting from the social welfare
maximization, should intervene in credit markets. Use of subsidies or loans to provide
credit guarantees and other means to lower market interest rates, so that those who
have access to loans for social projects.