420 New Classical Economics

420 New Classical Economics - New Classical Economics New...

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New Classical Economics 00:06 New Classical Economics Both  Monetarism   and  New Classical economics  have classical origins; both have  noninterventionist policy rules New Classical policy ineffectiveness proposition: The central policy tenet of the  new classical economist it that stabilization of real variables, Y and UR, cannot be  achieved by aggregate demand management. The values both in the short and  long run are insensitive to systematic aggregate demand management policies.  The Rational Expectations Concept and Its Implications In practice, Keynesians and monetarists have assumed that such price expectations  adjust slowly and can be fixed for the analysis of policy effects over short periods.  New Classicalists form  rational expectations:  expectations formed on the basis on all  available relevant information concerning the variable being predicted. Moreover, 
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This note was uploaded on 02/23/2012 for the course ECON 420 taught by Professor Hill during the Fall '08 term at UNC.

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420 New Classical Economics - New Classical Economics New...

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