Macro 3.3- Classical vs. Keynesian Aggregate Supply- Macroeconomics

[KxxxCxxxDxxx]

thank you so much wow

[korilmith]

you really help me alot in my report man!!!

[GloriyaDraganova]

THANK YOUUUUU!! :D

[cheers575]

Good work man...I like the way you explain things....

[Pedrofrombrazil]

Nice work! Subscribed! Happy New Year

[aphokster]

HI, I'm from another country and it results some dificult to understand the whole video, could u please add sub.

[UltraConservative298]

The reason prices did not fall during the Great Depression was wage controls imposed by the frigging government!

[Rasterius]

Keynsian economics is exactly the reason the US, Europe and Japan are in debt. You cannot borrow your way out of debt. There is increase in AD but from borrowed money, and the money goes to China since they produce all the goods the US consumes.

[MLCoolJ1]

You really doing good...thanks a bil. Can you pls work on a video on Mundell-Fleming/ IS-LM in relation to LOE and Closed Economy.

[parzrelmuzik]

wow

[kenyaaroxursox13]

anyone wanna write me an essay comparing and contrasting these two,,

I still don't get it :(

[galamonkey]

Keynesian theory hinges on the fallacy that wages and prices are "sticky". If they were sticky, Keynesian economics would be logical. In that sense, it does make sense. But in the real world, prices and wages are not sticky, at least not in a true free market. When the government subsidizes items, gives people free money, and sets an artificially low interest rate, the market will not react in the way it would naturally, which is with lower prices/wages. A free market needs to actually be free.

[misosong]

@galamonkey well said my friend. government intervention is actually "causing" the sticky wages and prices. Take the housing market for example. After the collapse in 2008, housing prices did come down. But because we propped the market back up, they didnt' fall as much as they were supposed to, to recorrect itself. Keynesian economics is causing so much harm

[General8675]

@galamonkey Hey, But look it does those things! Also when you have a strong/ unionized workforce they make the wages and therefore prices "sticky", which btw there is nothing in a free market that says you cannot unionize, its a free contract between willing persons. also what if the worker wants a contract that will say you can only fire me for such and such reasons, or they cannot drop prices because of mandatory wage increases based on a COLA for ex.

[chanarahasa]

ah yah sure, that's why 'free markets' have monopolies that set prices at extraordinarily high levels, or monopsonys that set wages ridiculously low....the free market is never really 'free' even where there is no government interference.

[LegoSaur37]

@chanarahasa Monopolies do not exist under a truly free market. They are born out of govt. favoritism.

[chanarahasa]

@LegoSaur37 o so THAT'S why rockefeller had a monopoly on oil and ruthlessly crushed his opposition, the GOVERNMENT let him. no, wait, the government tried to break his monopoly up.

[chanarahasa]

@LegoSaur37 but THAT must be why bill gates uses predatory pricing to maintain the microsoft monopoly on operating systems, the GOVERNMENT lets him. no, wait, the government tried to break him up too.

[chanarahasa]

@LegoSaur37 but gosh THAT must be why walmart moves into small towns and undercuts and destroys the local small businesses, the GOVERNMENT lets them. hmmm, no, the government has fined and prevented walmart from doing this.

[chanarahasa]

@LegoSaur37 your argument is ridiculous, of course in a "free market" profit seeking entrpreneurs try to dominate the market any way possible--they are greed-driven, NOT altruistic. READ SMITH for heaven's sake: "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices." The Wealth of Nations, Book I, Chapter X, Part II, pg.152

[racfd]

@galamonkey o yes that's why in the 'free market' monopolies charge much higher prices than equilbrium and monopsonies pay much lower wages than market equilbrium. there is no such thing as a truly 'free' market even without goverment intervention

[VFtiTAn]

awesome

[johammbass]

Keynesians somehow believe that there is a free lunch somewhere

[ObamaFTWdotcom]

@johammbass - No, they just realize that the "free market" sometimes hoards the lunch-making materials due to speculation, which results in less and less lunch preparation.

[johammbass]

Full employment??? Where, when and how?

Keynesian economics thinks that the effect of 1 borrowed dollar spent by the government creates something like 1.6 dollars in the economy. Ok, but how about when the government stops spending and starts taxing more to repay that dollar? How much contraction does 1 dollar pull-out cause?

Keynes was a retard

[darris321]

@johammbass I'm not sure, but that argument smells of strawman.

[UltraConservative298]

@johammbass Yep. Keynes was nothing more than a fascist. He believed that government needs to spend to stimulate demand during a recession, when it was the government that created the recession, and prevents the economy from recovering through price and wage control. Every crisis prior to the Great Depression recovered without government intervention, and it was government intervention that prevented the swift recovery of the Great Depression.

[racfd]

@johammbass you don't know much about actual economics. $1 taken out in taxes is taken from both household S and C, but $1 in G ALL goes back into the economy. you are assuming an MPS of .625 which has a KCM of 1.6--that would mean every $1 in taxes takes only 40cents out of the economy, while every $1 in G increases GDP by $1.6. and when government raises taxes and slows spending it does to so to slow the economy down and reduce inflation. it's called a cyclically balanced budget.

[cadehalada]

Inflation is higher prices? Your definitely a Keynesian. Inflation causes higher prices. They are not the same thing.

[racfd]

@cadehalada ahhh no actually inflation IS rising prices. many things CAUSE inflation: increased aggregate demand, decreased aggregate supply,but inflation MEANS rising prices. you are definitely guilty of the fallacy of definition . . . look it up.

[HardCoreProgrammer1]

Market Deregulation and better supply side policy (e.g. training) leading to economic expansion is what countries want

[Lius525]

@HardCoreProgrammer1 so why it doesn't work?

[trinhduongminh92]

Nice

[AmieMimiNg]

awww your teaching way is so cool, lol. Thanks for your video! You're great! Wish I was in your class! ^_^

[MILMAG1]

YOU´RE THE MAN!!

[shakaraka]

wow that made a lot more sense! amazing

[Metamorphisize]

i had one teacher teach me what you just showed, but another teacher just gave me short run AS curve sloping upward and a vertical long run AS curve.

[nsbizman]

My instructor just went over this in class and nobody got but now I get it. Thank you for your vids. Please keep them coming!

[TheKrakatoa1]

omg, u just uploaded this, while i was about to search keynesians vs classical.. lol

so cool 0.0

and i decided to click this