Answer to Question #260550 in Macroeconomics for shon

Question

How do Keynesians and classical differ in their beliefs about how long it takes the economy to reach long-run equilibrium? What implications do these differences in beliefs have for Keynesian and classical views about the usefulness of antirecessionary policies? About the types of shocks that cause most recessions?

Answer 1

Classical economists tend to believe that the prices usually adjust rapidly for restoration of the equilibrium in the shock's face. However, Keynesians tend to believe that the prices adjust in a slow pace, which may take more years.