MAC02 Unemployment
The Main Reading for this is Brian Ferguson: Lectures on JM Keynes General Theory (GT) , Chapter 1, linked below.
The original reading is long, and key points have been picked out L5, L6, L7 -- these three sets of short notes based on Brian Ferguson Lectures on GT Ch 1, Background and Historical Setting are required reading for Class on Wednesday. The main reading, and the notes are linked below.
1. Explain what is Say's Law and how this law is the basis for supply side economics. Explain how it implies that there will be no unemployment, and that there can be no recession -- less than full production of output.
2. Explain the phenomena that Keynes observed during the Great Depression, that led him to doubt the classical theories and to search for new theories of the labor market and of aggregate demand.
3. Explain the fallacy of composition, and how Keynes avoided it while classical economists fell into this trap.
IMPORTANT NOTE: Due to transition from classic Google Sites to NEW Google Sites, some of the links below no longer work. For the lectures L5, L6, L7 (and the complete sequence of 10 lectures on re-reading Keynes) see: KEYNES For convenience, this page is reproduced below
L2:How to read Keynes in Historical Context
L3:Post-Keynesian History examines influence of Keynes on 20th century
L4:Aspects of Polanyi's methodology: Objective & Subjective are inextricably entangled
L5:Economic ideas informing discourse in early 20th Century
L5.5: GT Chapter 1: One Pager
L6: How Keynes theory differs radically from classical, conventional
L7: GT Chapter 2: Keynesian Unemployment
L8: Keynes initiated a complex systems approach but followers failed to understand it
L9: Employment is about nominal wages.
L10: Comments on Varian -- in context of Keynes rejection of Supply and Demand in labor market