New classical macroeconomics, sometimes simply called new classical economics, is a school of thought in macroeconomics that builds its analysis entirely on a neoclassical framework. Specifically, it emphasizes the importance of rigorous foundations based on microeconomics, especially rational expectations.
New classical macroeconomics strives to provide neoclassical microeconomic foundations for macroeconomic analysis. This is in contrast with its rival new Keynesian school that uses microfoundations such as price stickiness and imperfect competition to generate macroeconomic models similar to earlier, Keynesian ones.
Read more about New Classical Macroeconomics: History, Foundation and Assumptions
Famous quotes containing the word classical:
“Classical art, in a word, stands for form; romantic art for content. The romantic artist expects people to ask, What has he got to say? The classical artist expects them to ask, How does he say it?”
—R.G. (Robin George)