Difference Between Classical And Classical Economic Thought

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The history of macroeconomic thought and policy was developed through different phases mainly marked by the depressions, recessions and expansion of the 1930s, 1960s, 1970s, 1980s, 1990s, and 2000s. Various macroeconomic theories were developed during these periods. Among them, Keynesian and classical economics addressed economic problems such as unemployment issue with similarities but also differences.
In this essay, I will identify similarities and differences in Keynesian and classical economic thought. Then, describe how Keynesian and classical economists address the issue of unemployment. And finally, I will describe new developments since the 1980s. To identify similarities in Keynesian and classical economic thought let us first examine their definitions: Classical economics is the body of macroeconomic thought associated primarily with 19th-century British economist David Ricardo that focused on the long run and on the forces that determine and produce growth in an economy’s potential output.
Keynesian Economics is the body of macroeconomic thought that asserts that changes in aggregate demand can create gaps between the actual and potential levels of output, and that such gaps can be prolonged. It stresses the use of fiscal and monetary policy to close such gaps.
We notice from those definitions that both thoughts focus on how an economy reaches its potential output through various factors.
Unlike similarities, there are more differences in Keynesian and
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