Outcome: Neoclassical Policy Prescriptions

What you’ll learn to do: understand the effects of tax and spending policy from a neoclassical perspective

Here are some of the specific things you’ll learn to do in this section:

  • Define and give examples of supply-side economics
  • Explain the types of lag times that often occur when solving economic problems
  • Describe the neoclassical long-run aggregate supply curve
  • Understand and describe the emergence of New Classical Economics, along with its main tenets
  • Define Ricardian Equivalence


The learning activities for this section include:

  • Reading: Effects of Tax and Spending Policy from a Neoclassical Perspective
  • Reading: Supply-Side Economics
  • Self Check: Supply-Side Economics
  • Reading: Policy Implications of the Neoclassical Perspective: Policy Lags
  • Self Check: Policy Lags
  • Reading: Policy Implications: No Phillips Curve Tradeoff
  • Self Check: No Phillips Curve Tradeoff
  • Reading: New Classical Economics and Rational Expectations
  • Self Check: New Classical Economics and Rational Expectations
  • Reading: Ricardian Equivalence: How Government Borrowing Affects Private Saving
  • Self Check: Ricardian Equivalence
  • Reading: Policy Implications: Inflation, Recession, and Unemployment
  • Self Check: Policy Implications: Inflation, Recession, and Unemployment

Take time to review and reflect on each of these activities in order to improve your performance on the assessment for this section.