Macroeconomics

Paper Summary:

The paper explains that there are two general approaches towards unemployment in economics theory acknowledged by the two major schools of thought of the 20th century. This includes classical unemployment and disequilibrium unemployment as promoted by the classical and monetarist schools. The paper discusses how Maynard Keynes conceived the idea of equilibrium unemployment and explains the criticism of this economic solution. The paper relates how his theory is only applicable for a short period of time and is thus not practical.

From the Paper:

"On the other hand, Keynes conceives equilibrium unemployment as "the number of people who are unwilling to accept a job at a certain wage rate", that is, the number of willing/unwilling to work at equilibrium wage. The main difference in thought, with respect to the labour market between the two schools, is the fact that in the Monetarist view, wages are just as other prices and are virtually reflecting the relationship between demand and supply on the open market, without any state intervention. For Keynes, wages are "sticky", which means that the level of wages will remain more or less constant."

Sample of Sources Used:

• Hoppe, Hans-Hermann. The Misesian Case against Keynes. Ludwig von Mises Institute. New York. 1992
• Rodda, Chris. Economics for International Students. Types of Unemployment. On the Internet at http://www.cr1.dircon.co.uk/TB/3/typesunemploy.htm
• An Introduction to the Keynesian Model. On the Internet at http://www.uri.edu/artsci/newecn/Classes/Art/INT1/Mac/1930s/1930sB.html
• Younkins, Edward. JEAN-BAPTISTE SAY'S LAW OF MARKETS: A FUNDAMENTAL, CONCEPTUAL INTEGRATION. On the Internet at http://www.quebecoislibre.org/06/060212-4.htm
• LABOUR MARKET THEORY AND EQUILIBRIUM UNEMPLOYMENT. On the Internet at http://www.sussex.ac.uk/Units/economics/ma_macro/topic3.doc

More papers on Macroeconomics:

• Essay # 87664 : "Macroeconomics: A University Student's Perspective"
• Essay # 54612 : "Macroeconomics"
• Analytical Essay # 147409 : "Macroeconomics and Economic Success"
• Essay # 103136 : "The Study of Macroeconomics"

APA Citation:

MLA Citation: