Neoclassical_synthesis

Neoclassical synthesis refers to a postwar academic movement in economics which attempted to absorb the macroeconomic thought of John Maynard Keynes into the orthodox thought of neoclassical economics. The mathematical economist Paul Samuelson, who seems to have coined the term, helped disseminate the "synthesis," partly through his technical writing and in his influential textbook.Samuelson, Paul A. (1955). Economics, 3rd ed.. McGraw-Hill.  Blanchard, Olivier Jean (1987), "Neoclassical synthesis," The New Palgrave: A Dictionary of Economics, v. 3, pp. 634-36. 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.Hicks, J.R. (1937). "Mr. Keynes and the \'Classics\': A Suggested Interpretation," Econometrica, 5(2), pp. 147-159 (via JSTOR). 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
• New classical macroeconomics

Notes

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