The Neoclassical LRAS vs Keynesian Aggregate Supply | IB Macroeconomics | IB Economics Exam Review
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- Опубліковано 28 лип 2024
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What both the neoclassical and keynesian analysis ignores is the distinctly different supply curve for nature, i.e., for the factor of production traditionally referred to as "land." The supply curve for land is, by definition, verticle because one cannot produce more land. The supply curve for land is shifted to the left because much of the potential supply of land is reduced by a combination of natural and legal factors. In any given regional market, for example, anywhere from 10-50 percent of the potential land area cannot be economically utilized. And, then, there is the reduction in supply caused by the hoarding of and specuation in locations that occurs because of the privatization of land rent. Thus, given our system of property law and taxation, the supply curve for land actually leans to the left.
Watching this video 6 years after published and it’s still perfectly relevant. Quite helpful thanks man.
Glad to hear it!
@@BradCartwrightEconomics I'm watching it today for the first time,I'm a second year university student and I'm so glad there's such an amazing teachers like you,,,,thankuuu
this is great, thanks!
A great explanation, thank youu!
You're very welcome!
In addition if we were using the Neoclassical Method and there was an increase in government regulations, what type of equilibrium would there be?
When using the Keynesian Method, if there is an increase in government spending, the price level would not move and the real GDP would increase. I was wondering however what type of equilibrium there would be on the graph. Is it at full employment, a recessionary gap, or an inflationary gap?