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Perhaps Schumpeter's view that John Stuart Mill put forth a half-way house between classical and neoclassical economics is consistent with this view. Georgists and other modern classical economists and historians such as Michael Hudson argue that a major division between classical and neo-classical economics is the treatment or recognition of ...
In response to the Keynesian view of the world, he made a restatement of the quantity theory in 1956 [21] and used it as a cornerstone for monetarist thinking. [18] Friedman agreed that money could affect output in the short run. Indeed, he believed that monetary policy was much more powerful in this respect than fiscal policy.
The first book of The General Theory of Employment, Interest and Money is a repudiation of Say's law. The classical view for which Keynes made Say a mouthpiece held that the value of wages was equal to the value of the goods produced, and that the wages were inevitably put back into the economy sustaining demand at the level of current production.
This question arises in classical political economy, where John Stuart Mill argues that money is unimportant, and that while money might disguise the true values in an economy, it would only do so for a limited period of time. [citation needed] This was used to argue against government intervention in political economy as a waste of time. The ...
Others like monetarism view money as being neutral only in the long run. When neutrality of money coincides with zero population growth, the economy is said to rest in steady-state equilibrium. [2]: 41–43 Superneutrality of money is a stronger property than neutrality of money.
Keynes summarizes the view of classical economists that the economy should be self-adjusting if wages are fluid, and that they blame rigidity in wages for problems like unemployment. He disagrees with what he says is the orthodox view, based on the quantity theory of money , is that wage reductions have a small effect on aggregate demand, but ...
The ordinary classical economist has no part in this tour de force. But if, on behalf of the ordinary classical economist, we declare that we would have preferred to investigate many of those problems in money terms, Mr. Keynes will reply that there is no classical theory of money wages and unemployment.
In macroeconomics, the classical dichotomy is the idea, attributed to classical and pre-Keynesian economics, that real and nominal variables can be analyzed separately. To be precise, an economy exhibits the classical dichotomy if real variables such as output and real interest rates can be completely analyzed without considering what is happening to their nominal counterparts, the money value ...