Concluding Remarks
The new Keynesianism developed in the 1980s and 1990s is clearly very different from the “old” brand and, some would argue, from Keynes’s own perspective as well. The one Keynesian feature shared by all the (otherwise very different) models of new Keynesianism is providing new arguments for the traditional claim that capitalist economies have an in-built tendency to settle at equilibria with unemployment.
However, the adjective “new” applies to both methodology and policy prescriptions. As to the former, emphasis on the macro relevance of market imperfections meant to a large extent drifting away from the perfect competition framework Keynes himself perhaps had in mind - though the general equilibrium models considered last do provide a consistent theory of unemployment as owing to low aggregate demand. As to the latter, that very emphasis implies that policy makers should go beyond their traditional concerns about monetary and fiscal mechanisms to control aggregate spending, and be careful about their regulatory powers. This is a lesson which definitely left its mark on the policy debates of the 2000s.CORRADO BENASSI
See also:
Keynesianism (II); Macroeconomics (III); Monetarism (II); New classical macroeconomics (II); PostKeynesianism (II).