The Keynesian and Neo-Keynesian Approaches to Short-Run Macro Economics

This Keynesian tradition differs from the classical one in not assuming that the economy is always in equilibrium with full employment or tends on its own to full employment within a reasonably short time. This was the core assertion of Keynes’ The General Theory published in 1936 and remains at the core of all models within the Keynesian tradition. This assertion has the corollary that appropriate macroeconomic policies could improve on the functioning of the economy.