3.Economic Growth.pptVIP

3. Economic Growth 3.1 Schools of Thought in Macroeconomics 3.2 Solow-Swan Growth Model 3.3 Endogenous Growth Models The most important schools of thought – Classical economists – Keynesians – Neo-classical synthesis ( neo- Keynesian synthesis) – Monetarists – New-Classical economists – Supply-siders – New-Keynesians Classical Economists quantity theory of money; Fisher’s equation of exchange: M = kPY,with k constant. LM curve vertical; AD curve independent of government consumption G. Fiscal policy useless. Just raises interest rate and crowds out investment. Classical Economi