Neoclassical synthesis was a postwar academic movement in economics that attempted to absorb the macroeconomic thought of John Maynard Keynes into the thought of neoclassical economics. Mainstream economics is largely dominated by the synthesis, being largely Keynesian on macroeconomics and neoclassical on microeconomics.[1]
The theory was developed by John Hicks, and popularized by the mathematical economist Paul Samuelson, who seems to have coined the term, and helped disseminate the "synthesis," partly through his technical writing and in his influential textbook, Economics.[2][3] The process began soon after the publication of Keynes' General Theory with the IS/LM model first presented by John Hicks in a 1937 article.[4] It continued with adaptations of the supply and demand model of markets to Keynesian theory. It represents incentives and costs as playing a pervasive role in shaping decision making. An immediate example of this is the consumer theory of individual demand, which isolates how prices (as costs) and income affect quantity demanded.
See also
- History of economic thought
- Mainstream economics
- Neo-Keynesian economics
- New classical macroeconomics
Notes
- ^ Clark, B. (1998). Political-economy: A comparative approach. Westport, CT: Preager.
- ^ Samuelson, Paul A. (1955). Economics, 3rd ed.. McGraw-Hill.
- ^ Blanchard, Olivier Jean (1008), "neoclassical synthesis," The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.
- ^ Hicks, J.R. (1937). "Mr. Keynes and the 'Classics': A Suggested Interpretation," Econometrica, 5(2), pp. 147-159 (via JSTOR).
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