ABSTRACT

Chapter 2 presented the basic neoclassical macroeconomic model as a “real” system, measuring all variables in units of the single product. It might be thought that this presentation was a “straw man,” because the analysis of monetary relationships is apparently a central characteristic of the neoclassical school. Indeed, in the 1980s, the term “monetarist” referred to an orthodox sect of the neoclassicists. However, this partitioning of economic analysis between the real system and the system in its monetary or nominal form is a fundamental trademark of the synthesis school, as inspection of any standard textbook will show.