Hacker Newsnew | past | comments | ask | show | jobs | submitlogin

Usually Keynsian economics is understood as economic thought that is based on aggregate demand, this is for example the view Wikipedia takes. [1] From there it is straightforward to argue that higher wages lead to higher employment, a view that makes Keynsian economics popular on the left.

The view, that too high wages cause unemployment, is a staple of supply side economics, the view that the economic process is driven by the supply side.

Krugman argues a lot about sticky wages recently, but not because this is a central tenet of Keneysian economics. Krugmann argues about sticky wages because it is a good argument against the troika's handling of the Greek crisis, since the internal adjustment in the Euro area would either mean inflation in Germany or deflation in Greece.

[1] https://en.wikipedia.org/wiki/Keynesian_economics



Did you read the article on wikipedia? Start from the heading "Concept".

https://en.wikipedia.org/wiki/Keynesian_economics#Concept

Supply side economics is not based on wage levels at all, but rather based on tax-based disincentives to employment and investment.

https://en.wikipedia.org/wiki/Supply-side_economics




Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: