What are the doctrines of modern macroeconomics?

Economics Dec 14, 2020

Expert Solution

Keynesian economics in the 1930s was the first departure from Classical economics since the time of Adam Smith in the 1700s. Just as Adam Smith is the Father of Economics, John Maynard Keynes is the Father of Macroeconomics.

Since Keynesian economics, a few more revisions have been made:

monetarism	the idea that government should simply control the money supply, setting it equal to GDP, but do nothing else
the new classical economics	based on the theory of Rational Expectations, which states that fiscal and monetary policies are no longer as effective because they are anticipated by businesses and individuals who include them in their planning
supply-side economics	also called Reaganomics, which advocates stimulating the economy by working to increase supply rather than demand

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