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.)

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

The neoclassical economics’ focal point is to establish the prices and productivity, revenue from the markets in the course of supplies and demands. The author’s neoclassical perspective is based on cap and trade solution which appealing to pure exchange. “For example, the cap on coal-based energy providers/producers would require them to reduce carbon emissions, and providers would be able to trade credits among themselves and with other energy producers.”The assumptions about human economic behavior are that people endeavor to make the most of outcomes as precise by their limited resources. People always want more, it’s the nature.

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

Innovation economics is to remove deficiency sources in the outside market. By doing innovation, which has possible to improve any imperfections technology changes, economy growth and as well as introducing clean energy innovations to the world. “Facilitating such innovative actions, improving productive and adaptive efficiency, and supporting a clean energy innovation system require a variety of policy tools to grow the economy in a strategic zero-carbon direction.”

1. What is your understanding of the neoclassical perspective as presented by the authors?

My understanding if the neoclassical perspective as presented by the authors on the issues at hand, is that there is a “straight forward,” monetary exchange between emitters of (GHG) for their emissions by means of a simple tax, such as a carbon tax.

2. What are the assumptions about human economic behavioral?

I believe that the assumptions about human behavior in regards to this purposes solution is that once their is a favorable monetary value, the markets will react favorably and lead to development of the necessary technologies.

3. What is your understanding of the neo-Keynesian perspective?

In contact to the neoclassical approach, the neo-Keynesian perspective is to instead create a emissions cap, and create subsidies for renewable energy technologies that contribute to renewable energy portfolio standards.

4. How does it differ from the neoclassical perspective?

The neo-Keynesian approach eliminates the need of a middleman and situational tactics of neoclassical, such as depending on how the market would respond to a carbon tax. Also by I stilling a (GHG) emissions cap, it creates a ceiling, which can be beneficial for regulations and pricing. Also there is an aggressive change to the necessary technological advances, compared to neoclassical.

5. What do neo-Keynesian economists view as the most important policies to address the challenges of climate change?

Neo- Keynesian economists view that, “price signals alone are insufficient to drive clean energy transformation and that carbon taxes that explicitly support clean energy innovation policies to spur research, development, and deployment of next generation alternatives are the preferable solution.”