Development of macroeconomics-Schools of Thought-Classical, Keynesian and Post-Keynesian

The development of macroeconomics has been shaped by different schools of thought throughout history, each with its own unique perspectives and theories about how economies function and how they should be managed. Here are the three main schools of thought:

1. Classical Economics: This school of thought was developed in the late 18th and early 19th centuries by economists such as Adam Smith and David Ricardo. Classical economists believed in the concept of 'laissez-faire' or 'let it be' economics. They argued that if left alone, the economy would naturally regulate itself through the invisible hand of the market. They believed in the self-correcting nature of markets and opposed government intervention.

2. Keynesian Economics: This school of thought was developed by John Maynard Keynes in the 1930s in response to the Great Depression. Keynesians believe that government intervention is necessary to stabilize the economy and prevent economic recessions. They argue that during a recession, government spending can help to stimulate demand and pull the economy out of the downturn.

3. Post-Keynesian Economics: This school of thought emerged after World War II and further developed Keynes's theories. Post-Keynesians reject the idea that economies naturally return to a state of equilibrium and believe that government intervention is necessary to ensure full employment and economic stability. They also emphasize the importance of uncertainty and expectations in shaping economic behavior.

Each of these schools of thought has contributed to our understanding of macroeconomics and continues to influence economic policy today.