One of the reasons elucidated by William Emmons for economic stagnation in comparison to post war economy is stagnant incomes. He  has observed that there has been an upward trend with inflation with a disproportionate stagnant trend in incomes and as a result of this situation less wages means less savings and investments leading to decrease in productivity thus lowering the standards of living.

According to the Emmons article. he question “Can American consumers continue to serve as the engine of U.S. and global economic growth as they did during recent decades? Several powerful trends suggest not, at least for a while. He mentioned five trends working against consumer spending and one of them is Stagnant Growth. Stagnant growth is potential slow economic growth and very high unemployment rate. In other words, jobs growth doesnt not match with the job seeker. Moreover, the prices of things will keep rising when ecnomic isn’t. When there is unequal growth between the consumer spending or consumer earning will affect the whole economic growth.

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1).

My view on the neoclassical perspective as presented by the author is that people have rational preferences and they are associated with values, individual goals in the markets are maximum profits and that of firms are maximum profits and people act based on information.

2).

The Neo-Keynesian theory assumes imperfect competition in the market and thus exist inequitable distribution of wealth and income and its concepts promotes subsidies for the development and use of clean energy

1. What is your understanding of the neoclassical perspective as presented by the authors? What are the assumptions about human economic behavior?

My understanding of the neoclassical perspective as presented by the authors is that the authors believe that the markets will eventually grow themselves to a point where technology can be made to contract the environment. They believe that if they simply put a tax on carbon emissions and leave it like that the problem will simply resolve itself when the market is right and the need is greatest. They believe that if they do anything but place a carbon tax or cap and trade policy into effect it will go against their policy of “economic growth is achieved by maximizing allocative efficiency”(pg 4). Therefore all the neoclassical policymakers will do is place a carbon tax or a cap and trade policy because they believe that is the only thing that will work against climate change.  The assumptions about human economic behavior in my opinion is that we will continue to consume and spend money, the world is run by supply and demand as the demand continues to grow so too must the supply grow, as well it is believed that eventually when the need is greatest humanity will find the solution.

2. What is your understanding of the neo-Keynesian perspective? How does it differ from the neoclassical perspective? What do neo-Keynesian economists view as the most important policies to address the challenges of climate change?

My understanding of the neo-Keynesian perspective is that they focus solely on the demand without a regard to the supply part. They also believed that increasing government spending will increase consumer demand.  The difference between neoclassical perspective and neo-Keynesian perspective is that in neoclassical perspective they believe the market will fix itself where the neo-Keynessians believe that  “economic growth is a result of business investment, government spending, and consumer spending because of the demand for goods and services it produces. The neo-Keynesian believes in the sustainability of “green businesses” and the distribution of wealth.

My understanding of neoclassical perspective as presented by the authors is that it mainly focuses on the supply and demand. It focuses on the prices, outputs and income. Equilibrium is set when the amount of food sold is equal to the amount of good produced, therefore making sure that prices are ranged with marginal costs. They tend to maximize utility and firms maximums profits. Neoclassical believe that pricing carbon through a tax will allow markets to increase the price of high-carbon energy will create space for others.

My understanding of neo-Keynesian perspective is that when there is a profit, it is because of economic growth. It is growing because of the demand that people want; increasing the government spending which then increases consumer’s demands. The main difference from Neoclassical and Neo-Keynesian is that one practice free market spending while the other focuses on government spending.

1. What is your understanding of the neoclassical perspective as presented by the authors? What are the assumptions about human economic behavior?

   My views of the neoclassical perspective is that there is a free market. They go against government intervention or policy that distorts allocative efficiency because they believe it will harm economic growth. In other words, the market would be a continuous cycle and work its way through problems. Through human economic behavior, I believe that if prices begin to drop, and society becomes unsteady, people will take initiative and start producing goods because inputs are cheaper.

2. The authors discuss what they call “Innovation Economics.” What do Atkinson and Hackler mean by innovation economics? Describe their perspective.

   Atkinson and Hackler refer to innovation economics as understanding the problems occurring in society and finding solutions through innovations to help economics growth. According to the text, they strive to improve productive and adaptive efficiency, allowing an individual, an organization or firm and even broader entities, such as industries, cities, and entire nations to be more productive and innovative.

1. The authors discuss what they call“Innovation Economics.” What do Atkinson and Hackler mean by innovation economics? Describe their perspective.

The authors suggest that the predominant doctrines devalue innovations. This results in a 20^th century perspective to address 21st century issues. The doctrine of innovative economics reconfigures previous models to recognize technology, entrepreneurship, innovation as primary factors as economic growth.

2. What are the mainproblems the authors have with both the neoclassical and neo-Keynesian views about how to address the problem of climate change? What are the three arguments the authors cite as to why neither the neoclassical nor the neo-Keynesian views offer an suitable policy framework for addressing the climate challenges of the 21^st century?

According to the authors, none of the predominant three doctrines (conservative neoclassical, liberal classical, and neo- Keynesian) offer a suitable approach to the climate change policy. They argue that this is largely due to three main factors. First, they suggest that each doctrine undervalues the importance of innovation and focuses to keep the economy stable and at equilibrium, promoting economical growth. Second, they undervalue other factors that drive growth such as institutional and technological-change factors and instead establish the importance on macroeconomics factors. Lastly, the above stated doctrines failed to recognize the complicated procedure of technological innovations.

1.What is your understanding of the neo-Keynesian perspective? How does it differ from the neoclassical perspective? What do neo-Keynesian economists view as the most important policies to address the challenges of climate change?

Neo-Keynesian perspective is based on maintaining the economic growth through investments, governments and consumers spending. Neo-Keynesian focuses more on the demand side rather than the supply-side because they believe that the increase of consumer demand will result in the increase of investment, aggregate demands, and more spurs of government growth. While neoclassical mainly focus on the prices and products through supply and demand. Neoclassical economists main principals are economic with grow if scarce resources are being used and meeting people’s needs. Supply should equal demand. Neo-Keynesian’s thoughts about climate change are that they want new regulation and a level playing field of low and high carbon energy sources

2. The authors discuss what they call “Innovation Economics.” What do Atkinson and Hackler mean by innovation economics? Describe their perspective.

The authors refer innovation economics as understanding the problems occurring in the society and finding ways through innovations to help economic growth. The authors stated that innovation economists suggest that having the knowledge of product and adaptive efficiency allows us to understand what innovation can create growth.

Vena Taylor- Moses
Blog #1

1. What is your understanding of the neoclassical perspective as presented by the authors? What are the assumptions about human economic behavior?

The neoclassical perspective as presented by the authors believe that a price must be set on carbon which is done through the use of carbon tax or cap and trade which is the only principle and sole policy response needed to address the issue of climate change. According to the authors, one of their primary principles when coming to the issue of climate change is that economic growth is achieved by maximizing allocative efficiency where society receives the greatest net benefit when the distribution of available resources results in a desired quantity of goods. Another neoclassical principle is their belief that supply normally meets demand where the economy is simply a large market of goods and services that is generally in equilibrium and usually best left to itself. Neoclassical also believe that individuals act in response to incentives to rationally maximize their own self-interest, and that the collective pursuit of individual self-interest will also maximize public interest.

The assumptions about human economic behavior is that the individuals act in response to incentives to rationally maximize their own self-interest, and that the collective pursuit of individual self-interest will also maximize public interest. According to the authors the individual who “ intends only his own gain” will, in the course of maximizing his needs, be “led by an invisible hand to promote the public interest, however new research in behavioral economics is showing an opposite to these views.

What is your understanding of neo-Kenynesian perspective? How does it differ from neoclassical perspective? What do neo-Keynesian economist view as the most important policies to address the challenges of climate change?

My understanding of the neo-Keynesian perspective is that economic growth is a result of business investment, government spending, and consumer spending because of the demand for goods and services it produces. This key principle shapes neo-Keynesian economic policies as they tend to focus on increasing government spending, with the belief that such investment will lead to increased aggregate consumer demand.
Neo-Keynesians also tend to focus on the demand led economic growth side will little or no focus on the supply side of economy or what the producers or manufacturers do. They see policies, such as costly regulations, that might negatively impact the supply-side have little effect on overall economic growth. For this reason, they are more willing to support direct government regulation of economic activity. They also see it as if companies think consumer demand is increasing, they will have an incentive to invest more; and contend that government can do little to directly spur more growth, other than ensure high levels of aggregate demand.

How does it differ from the neoclassical perspective?
The don’t see an equilibrium within the market where supply meets demand but more focus on just the demand side of the economy. For the neo-Keynesian economic growth is not achieved by maximizing allocative efficiency, but rather social welfare, which is as a more equitable distribution of wealth and the achievement of social policy objectives (such as a clean environment, small business growth, etc.)