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How did New Keynesian Economic Theory address the perceived limitations of Classical Keynesian Economic Theory. Please be precise over what was wrong with classical and
How did New Keynesian Economic Theory address the perceived limitations of Classical Keynesian Economic Theory.
Please be precise over what was wrong with classical and how new keynesian addressed this.
For example:
Classical Keynesian stated that fiscal policy could regulate the business cycle. New Keynesian Economic Theory finds that this is true in the short run but in the long run expansionary monetary policy leads to inflation only.
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