Post-Keynesian Theory

Post-Keynesian Theory emphasizes the importance of aggregate demand, financial markets, and uncertainty in understanding the economy. It critiques classical models by highlighting that economies are influenced by imperfect competition, income distribution, and the role of money and credit. Unlike traditional views that assume automatic full employment, Post-Keynesians believe that economies can operate below potential output, requiring active policy measures. They focus on realistic assumptions about human behavior, market imperfections, and the significance of government intervention to achieve stability and growth.