Capitalism Macroeconomics Lecture 12

Keynesianism and Neo-Keynesianism. Exposition and critique of the Keynesian analysis: the unemployment-equilibrium doctrine and the IS curve; the consumption and savings functions; the diminishing marginal efficiency of capital; liquidity preference and the liquidity trap; compensatory fiscal policy and the multipliers. The economic consequences of Keynesianism. READINGS Reisman: Chapter 18 Samuelson: Chapters 6–8 (to p. 142) Optional: Samuelson, Chapter 15 Ludwig von Mises “Stones Into Bread, The Keynesian Miracle” and “Lord Keynes and Say’s Law” in Supplementary Readings in Macroeconomics. [Ludwig von Mises, Planning for Freedom, pp. 50–71] Optional: Adam Smith, “Of Public Debts” in Supplementary Readings in Macroeconomics. [Adam Smith, The Wealth of Nations, Book 5, Chapter 3]