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class="firstHeading mw-first-heading"><span class="mw-page-title-main">Keynesian cross</span></h1> <div id="p-lang-btn" class="vector-dropdown mw-portlet mw-portlet-lang" > <input type="checkbox" id="p-lang-btn-checkbox" role="button" aria-haspopup="true" data-event-name="ui.dropdown-p-lang-btn" class="vector-dropdown-checkbox mw-interlanguage-selector" aria-label="Go to an article in another language. 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interwiki-as mw-list-item"><a href="https://as.wikipedia.org/wiki/%E0%A6%95%E0%A7%87%E0%A6%87%E0%A6%A8%E0%A7%8D%E0%A6%B8%E0%A6%BF%E0%A6%AF%E0%A6%BC%E0%A6%BE%E0%A6%A8_%E0%A6%95%E0%A7%8D%E0%A7%B0%E0%A6%9B" title="কেইন্সিয়ান ক্ৰছ – Assamese" lang="as" hreflang="as" data-title="কেইন্সিয়ান ক্ৰছ" data-language-autonym="অসমীয়া" data-language-local-name="Assamese" class="interlanguage-link-target"><span>অসমীয়া</span></a></li><li class="interlanguage-link interwiki-cs mw-list-item"><a href="https://cs.wikipedia.org/wiki/Keynesi%C3%A1nsk%C3%BD_k%C5%99%C3%AD%C5%BE" title="Keynesiánský kříž – Czech" lang="cs" hreflang="cs" data-title="Keynesiánský kříž" data-language-autonym="Čeština" data-language-local-name="Czech" class="interlanguage-link-target"><span>Čeština</span></a></li><li class="interlanguage-link interwiki-da mw-list-item"><a href="https://da.wikipedia.org/wiki/Keynesianske_kryds" title="Keynesianske kryds – Danish" lang="da" hreflang="da" data-title="Keynesianske kryds" 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.sidebar-pretitle-with-top-image,.mw-parser-output .sidebar-caption{padding:0.2em 0.4em 0;line-height:1.2em}.mw-parser-output .sidebar-pretitle{padding:0.4em 0.4em 0;line-height:1.2em}.mw-parser-output .sidebar-title,.mw-parser-output .sidebar-title-with-pretitle{padding:0.2em 0.8em;font-size:145%;line-height:1.2em}.mw-parser-output .sidebar-title-with-pretitle{padding:0.1em 0.4em}.mw-parser-output .sidebar-image{padding:0.2em 0.4em 0.4em}.mw-parser-output .sidebar-heading{padding:0.1em 0.4em}.mw-parser-output .sidebar-content{padding:0 0.5em 0.4em}.mw-parser-output .sidebar-content-with-subgroup{padding:0.1em 0.4em 0.2em}.mw-parser-output .sidebar-above,.mw-parser-output .sidebar-below{padding:0.3em 0.8em;font-weight:bold}.mw-parser-output .sidebar-collapse .sidebar-above,.mw-parser-output .sidebar-collapse .sidebar-below{border-top:1px solid #aaa;border-bottom:1px solid #aaa}.mw-parser-output .sidebar-navbar{text-align:right;font-size:115%;padding:0 0.4em 0.4em}.mw-parser-output .sidebar-list-title{padding:0 0.4em;text-align:left;font-weight:bold;line-height:1.6em;font-size:105%}.mw-parser-output .sidebar-list-title-c{padding:0 0.4em;text-align:center;margin:0 3.3em}@media(max-width:640px){body.mediawiki .mw-parser-output .sidebar{width:100%!important;clear:both;float:none!important;margin-left:0!important;margin-right:0!important}}body.skin--responsive .mw-parser-output .sidebar a>img{max-width:none!important}@media screen{html.skin-theme-clientpref-night .mw-parser-output .sidebar:not(.notheme) .sidebar-list-title,html.skin-theme-clientpref-night .mw-parser-output .sidebar:not(.notheme) .sidebar-title-with-pretitle{background:transparent!important}html.skin-theme-clientpref-night .mw-parser-output .sidebar:not(.notheme) .sidebar-title-with-pretitle a{color:var(--color-progressive)!important}}@media screen and (prefers-color-scheme:dark){html.skin-theme-clientpref-os .mw-parser-output .sidebar:not(.notheme) .sidebar-list-title,html.skin-theme-clientpref-os .mw-parser-output .sidebar:not(.notheme) .sidebar-title-with-pretitle{background:transparent!important}html.skin-theme-clientpref-os .mw-parser-output .sidebar:not(.notheme) .sidebar-title-with-pretitle a{color:var(--color-progressive)!important}}@media print{body.ns-0 .mw-parser-output .sidebar{display:none!important}}</style><table class="sidebar sidebar-collapse nomobile nowraplinks"><tbody><tr><td class="sidebar-pretitle">Part of <a href="/wiki/Category:Macroeconomics" title="Category:Macroeconomics">a series</a> on</td></tr><tr><th class="sidebar-title-with-pretitle"><a href="/wiki/Macroeconomics" title="Macroeconomics">Macroeconomics</a></th></tr><tr><td class="sidebar-image" style="padding-top:0.6em;"><span class="notpageimage" typeof="mw:File"><a href="/wiki/File:Ec_8_(26088200676)_(cropped).jpg" class="mw-file-description"><img alt="Federal Reserve" src="//upload.wikimedia.org/wikipedia/commons/thumb/8/8f/Ec_8_%2826088200676%29_%28cropped%29.jpg/220px-Ec_8_%2826088200676%29_%28cropped%29.jpg" decoding="async" width="220" height="150" class="mw-file-element" srcset="//upload.wikimedia.org/wikipedia/commons/thumb/8/8f/Ec_8_%2826088200676%29_%28cropped%29.jpg/330px-Ec_8_%2826088200676%29_%28cropped%29.jpg 1.5x, //upload.wikimedia.org/wikipedia/commons/thumb/8/8f/Ec_8_%2826088200676%29_%28cropped%29.jpg/440px-Ec_8_%2826088200676%29_%28cropped%29.jpg 2x" data-file-width="2400" data-file-height="1633" /></a></span></td></tr><tr><td class="sidebar-content"> <div class="sidebar-list mw-collapsible mw-collapsed"><div class="sidebar-list-title" style="background:transparent;border-top:1px solid #aaa;text-align:center;;color: var(--color-base)">Basic concepts</div><div class="sidebar-list-content mw-collapsible-content hlist"> <ul><li><a href="/wiki/Aggregate_demand" title="Aggregate demand">Aggregate demand</a></li> <li><a href="/wiki/Aggregate_supply" title="Aggregate supply">Aggregate supply</a></li> <li><a href="/wiki/Business_cycle" title="Business cycle">Business cycle</a></li> <li><a href="/wiki/Compound_annual_growth_rate" title="Compound annual growth rate">CAGR</a></li> <li><a href="/wiki/Deflation" title="Deflation">Deflation</a></li> <li><a href="/wiki/Demand_shock" title="Demand shock">Demand shock</a></li> <li><a href="/wiki/Disinflation" title="Disinflation">Disinflation</a></li> <li><a href="/wiki/Effective_demand" title="Effective demand">Effective demand</a></li> <li>Expectations <ul><li><a href="/wiki/Adaptive_expectations" title="Adaptive expectations">Adaptive</a></li> <li><a href="/wiki/Rational_expectations" title="Rational expectations">Rational</a></li></ul></li> <li><a href="/wiki/Financial_crisis" title="Financial crisis">Financial crisis</a></li> <li><a href="/wiki/Economic_growth" title="Economic growth">Growth</a></li> <li><a href="/wiki/Inflation" title="Inflation">Inflation</a> <ul><li><a href="/wiki/Demand-pull_inflation" title="Demand-pull inflation">Demand-pull</a></li> <li><a href="/wiki/Cost-push_inflation" title="Cost-push inflation">Cost-push</a></li></ul></li> <li><a href="/wiki/Interest_rate" title="Interest rate">Interest rate</a></li> <li><a href="/wiki/Investment_(macroeconomics)" title="Investment (macroeconomics)">Investment</a></li> <li><a href="/wiki/Liquidity_trap" title="Liquidity trap">Liquidity trap</a></li> <li><a href="/wiki/Measures_of_national_income_and_output" title="Measures of national income and output">Measures of national income and output</a> <ul><li><a href="/wiki/Gross_domestic_product" title="Gross domestic product">GDP</a></li> <li><a href="/wiki/Gross_national_income" title="Gross national income">GNI</a></li> <li><a href="/wiki/Net_national_income" title="Net national income">NNI</a></li></ul></li> <li><a href="/wiki/Microfoundations" title="Microfoundations">Microfoundations</a></li> <li><a href="/wiki/Money" title="Money">Money</a> <ul><li><a href="/wiki/Endogenous_money" title="Endogenous money">Endogenous</a></li></ul></li> <li><a href="/wiki/Money_creation" title="Money creation">Money creation</a></li> <li><a href="/wiki/Demand_for_money" title="Demand for money">Demand for money</a> <ul><li><a href="/wiki/Liquidity_preference" title="Liquidity preference">Liquidity preference</a></li></ul></li> <li><a href="/wiki/Money_supply" title="Money supply">Money supply</a></li> <li><a href="/wiki/National_accounts" title="National accounts">National accounts</a> <ul><li><a href="/wiki/System_of_National_Accounts" title="System of National Accounts">SNA</a></li></ul></li> <li><a href="/wiki/Nominal_rigidity" title="Nominal rigidity">Nominal rigidity</a></li> <li><a href="/wiki/Price_level" title="Price level">Price level</a></li> <li><a href="/wiki/Recession" title="Recession">Recession</a></li> <li><a href="/wiki/Shrinkflation" title="Shrinkflation">Shrinkflation</a></li> <li><a href="/wiki/Stagflation" title="Stagflation">Stagflation</a></li> <li><a href="/wiki/Supply_shock" title="Supply shock">Supply shock</a></li> <li><a href="/wiki/National_saving" title="National saving">Saving</a></li> <li><a href="/wiki/Unemployment" title="Unemployment">Unemployment</a></li></ul> </div></div></td> </tr><tr><td class="sidebar-content"> <div class="sidebar-list mw-collapsible mw-collapsed"><div class="sidebar-list-title" style="background:transparent;border-top:1px solid #aaa;text-align:center;;color: var(--color-base)">Policies</div><div class="sidebar-list-content mw-collapsible-content hlist"> <ul><li><a href="/wiki/Fiscal_policy" title="Fiscal policy">Fiscal</a></li> <li><a href="/wiki/Monetary_policy" title="Monetary policy">Monetary</a></li> <li><a href="/wiki/Commercial_policy" title="Commercial policy">Commercial</a></li> <li><a href="/wiki/Central_bank" title="Central bank">Central bank</a></li> <li><a href="/wiki/Universal_basic_income" title="Universal basic income">Universal basic income</a></li></ul> </div></div></td> </tr><tr><td class="sidebar-content"> <div class="sidebar-list mw-collapsible mw-collapsed"><div class="sidebar-list-title" style="background:transparent;border-top:1px solid #aaa;text-align:center;;color: var(--color-base)">Models</div><div class="sidebar-list-content mw-collapsible-content hlist"> <ul><li><a href="/wiki/IS%E2%80%93LM_model" title="IS–LM model">IS–LM</a></li> <li><a href="/wiki/AD%E2%80%93AS_model" title="AD–AS model">AD–AS</a></li> <li><a class="mw-selflink selflink">Keynesian cross</a></li> <li><a href="/wiki/Multiplier_(economics)" title="Multiplier (economics)">Multiplier</a></li> <li><a href="/wiki/Accelerator_effect" title="Accelerator effect">Accelerator</a></li> <li><a href="/wiki/Phillips_curve" title="Phillips curve">Phillips curve</a></li> <li><a href="/wiki/Arrow%E2%80%93Debreu_model" title="Arrow–Debreu model">Arrow–Debreu</a></li> <li><a href="/wiki/Harrod%E2%80%93Domar_model" title="Harrod–Domar model">Harrod–Domar</a>Нмиф</li> <li><a href="/wiki/Solow%E2%80%93Swan_model" title="Solow–Swan model">Solow–Swan</a></li> <li><a href="/wiki/Ramsey%E2%80%93Cass%E2%80%93Koopmans_model" title="Ramsey–Cass–Koopmans model">Ramsey–Cass–Koopmans</a></li> <li><a href="/wiki/Overlapping_generations_model" title="Overlapping generations model">Overlapping generations</a></li> <li><a href="/wiki/General_equilibrium_theory" title="General equilibrium theory">General equilibrium</a> <ul><li><a href="/wiki/Dynamic_stochastic_general_equilibrium" title="Dynamic stochastic general equilibrium">DSGE</a></li></ul></li> <li><a href="/wiki/Endogenous_growth_theory" title="Endogenous growth theory">Endogenous growth</a></li> <li><a href="/wiki/Matching_theory_(economics)" class="mw-redirect" title="Matching theory (economics)">Matching theory</a></li> <li><a href="/wiki/Mundell%E2%80%93Fleming_model" title="Mundell–Fleming model">Mundell–Fleming</a></li> <li><a href="/wiki/Overshooting_model" title="Overshooting model">Overshooting</a></li> <li><a href="/wiki/NAIRU" title="NAIRU">NAIRU</a></li></ul> </div></div></td> </tr><tr><td class="sidebar-content"> <div class="sidebar-list mw-collapsible mw-collapsed"><div class="sidebar-list-title" style="background:transparent;border-top:1px solid #aaa;text-align:center;;color: var(--color-base)">Related fields</div><div class="sidebar-list-content mw-collapsible-content hlist"> <ul><li><a href="/wiki/Econometrics" title="Econometrics">Econometrics</a></li> <li><a href="/wiki/Economic_statistics" title="Economic statistics">Economic statistics</a></li> <li><a href="/wiki/Monetary_economics" title="Monetary economics">Monetary economics</a></li> <li><a href="/wiki/Development_economics" title="Development economics">Development economics</a></li> <li><a href="/wiki/International_economics" title="International economics">International economics</a></li></ul> </div></div></td> </tr><tr><td class="sidebar-content"> <div class="sidebar-list mw-collapsible mw-collapsed"><div class="sidebar-list-title" style="background:transparent;border-top:1px solid #aaa;text-align:center;;color: var(--color-base)"><a href="/wiki/History_of_macroeconomic_thought" title="History of macroeconomic thought">Schools</a></div><div class="sidebar-list-content mw-collapsible-content hlist"><i>Mainstream</i> <ul><li><a href="/wiki/Keynesian_economics" title="Keynesian economics">Keynesian</a> <ul><li><a href="/wiki/Neo-Keynesian_economics" class="mw-redirect" title="Neo-Keynesian economics">Neo-</a></li> <li><a href="/wiki/New_Keynesian_economics" title="New Keynesian economics">New</a></li></ul></li> <li><a href="/wiki/Monetarism" title="Monetarism">Monetarism</a></li> <li><a href="/wiki/New_classical_macroeconomics" title="New classical macroeconomics">New classical</a> <ul><li><a href="/wiki/Real_business-cycle_theory" title="Real business-cycle theory">Real business-cycle theory</a></li></ul></li> <li><a href="/wiki/Stockholm_school_(economics)" class="mw-redirect" title="Stockholm school (economics)">Stockholm</a></li> <li><a href="/wiki/Supply-side_economics" title="Supply-side economics">Supply-side</a></li> <li><a href="/wiki/New_neoclassical_synthesis" title="New neoclassical synthesis">New neoclassical synthesis</a></li> <li><a href="/wiki/Saltwater_and_freshwater_economics" title="Saltwater and freshwater economics">Saltwater and freshwater</a></li></ul> <p><i>Heterodox</i> </p> <ul><li><a href="/wiki/Austrian_School" class="mw-redirect" title="Austrian School">Austrian</a></li> <li><a href="/wiki/Chartalism" title="Chartalism">Chartalism</a> <ul><li><a href="/wiki/Modern_monetary_theory" title="Modern monetary theory">Modern monetary theory</a></li></ul></li> <li><a href="/wiki/Ecological_economics" title="Ecological economics">Ecological</a></li> <li><a href="/wiki/Post-Keynesian_economics" title="Post-Keynesian economics">Post-Keynesian</a> <ul><li><a href="/wiki/Monetary_circuit_theory" title="Monetary circuit theory">Circuitism</a></li></ul></li> <li><a href="/wiki/Disequilibrium_macroeconomics" title="Disequilibrium macroeconomics">Disequilibrium</a></li> <li><a href="/wiki/Marxian_economics" title="Marxian economics">Marxian</a></li> <li><a href="/wiki/Market_monetarism" title="Market monetarism">Market monetarism</a></li></ul> </div></div></td> </tr><tr><td class="sidebar-content"> <div class="sidebar-list mw-collapsible mw-collapsed"><div class="sidebar-list-title" style="background:transparent;border-top:1px solid #aaa;text-align:center;;color: var(--color-base)"><a href="/wiki/Category:Macroeconomists" title="Category:Macroeconomists">People</a></div><div class="sidebar-list-content mw-collapsible-content hlist"> <ul><li><a href="/wiki/Fran%C3%A7ois_Quesnay" title="François Quesnay">François Quesnay</a></li> <li><a href="/wiki/Adam_Smith" title="Adam Smith">Adam Smith</a></li> <li><a href="/wiki/Thomas_Robert_Malthus" title="Thomas Robert Malthus">Thomas Robert Malthus</a></li> <li><a href="/wiki/Karl_Marx" title="Karl Marx">Karl Marx</a></li> <li><a href="/wiki/L%C3%A9on_Walras" title="Léon Walras">Léon Walras</a></li> <li><a href="/wiki/Knut_Wicksell" title="Knut Wicksell">Knut Wicksell</a></li> <li><a href="/wiki/Irving_Fisher" title="Irving Fisher">Irving Fisher</a></li> <li><a href="/wiki/Wesley_Clair_Mitchell" title="Wesley Clair Mitchell">Wesley Clair Mitchell</a></li> <li><a href="/wiki/John_Maynard_Keynes" title="John Maynard Keynes">John Maynard Keynes</a></li> <li><a href="/wiki/Alvin_Hansen" title="Alvin Hansen">Alvin Hansen</a></li> <li><a href="/wiki/Micha%C5%82_Kalecki" title="Michał Kalecki">Michał Kalecki</a></li> <li><a href="/wiki/Gunnar_Myrdal" title="Gunnar Myrdal">Gunnar Myrdal</a></li> <li><a href="/wiki/Simon_Kuznets" title="Simon Kuznets">Simon Kuznets</a></li> <li><a href="/wiki/Joan_Robinson" title="Joan Robinson">Joan Robinson</a></li> <li><a href="/wiki/Friedrich_Hayek" title="Friedrich Hayek">Friedrich Hayek</a></li> <li><a href="/wiki/John_Hicks" title="John Hicks">John Hicks</a></li> <li><a href="/wiki/Richard_Stone" title="Richard Stone">Richard Stone</a></li> <li><a href="/wiki/Hyman_Minsky" title="Hyman Minsky">Hyman Minsky</a></li> <li><a href="/wiki/Milton_Friedman" title="Milton Friedman">Milton Friedman</a></li> <li><a href="/wiki/Paul_Samuelson" title="Paul Samuelson">Paul Samuelson</a></li> <li><a href="/wiki/Lawrence_Klein" title="Lawrence Klein">Lawrence Klein</a></li> <li><a href="/wiki/Edmund_Phelps" title="Edmund Phelps">Edmund Phelps</a></li> <li><a href="/wiki/Robert_Lucas_Jr." title="Robert Lucas Jr.">Robert Lucas Jr.</a></li> <li><a href="/wiki/Edward_C._Prescott" title="Edward C. Prescott">Edward C. Prescott</a></li> <li><a href="/wiki/Peter_Diamond" title="Peter Diamond">Peter Diamond</a></li> <li><a href="/wiki/William_Nordhaus" title="William Nordhaus">William Nordhaus</a></li> <li><a href="/wiki/Joseph_Stiglitz" title="Joseph Stiglitz">Joseph Stiglitz</a></li> <li><a href="/wiki/Thomas_J._Sargent" title="Thomas J. Sargent">Thomas J. Sargent</a></li> <li><a href="/wiki/Paul_Krugman" title="Paul Krugman">Paul Krugman</a></li> <li><a href="/wiki/Greg_Mankiw" title="Greg Mankiw">N. Gregory Mankiw</a></li></ul> </div></div></td> </tr><tr><td class="sidebar-content"> <div class="sidebar-list mw-collapsible mw-collapsed"><div class="sidebar-list-title" style="background:transparent;border-top:1px solid #aaa;text-align:center;;color: var(--color-base)">See also</div><div class="sidebar-list-content mw-collapsible-content hlist"> <ul><li><a href="/wiki/Macroeconomic_model" title="Macroeconomic model">Macroeconomic model</a></li> <li><a href="/wiki/List_of_important_publications_in_economics#Macroeconomics" title="List of important publications in economics">Publications in macroeconomics</a></li> <li><a href="/wiki/Economics" title="Economics">Economics</a> <ul><li><a href="/wiki/Applied_economics" title="Applied economics">Applied</a></li></ul></li> <li><a href="/wiki/Microeconomics" title="Microeconomics">Microeconomics</a></li> <li><a href="/wiki/Political_economy" title="Political economy">Political economy</a></li> <li><a href="/wiki/Mathematical_economics" title="Mathematical economics">Mathematical economics</a></li></ul> </div></div></td> </tr><tr><td class="sidebar-below plainlist"> <ul><li><span class="nowrap"><span class="noviewer" typeof="mw:File"><span><img alt="icon" src="//upload.wikimedia.org/wikipedia/commons/thumb/5/55/Bills_and_coins.svg/16px-Bills_and_coins.svg.png" decoding="async" width="16" height="8" class="mw-file-element" srcset="//upload.wikimedia.org/wikipedia/commons/thumb/5/55/Bills_and_coins.svg/24px-Bills_and_coins.svg.png 1.5x, //upload.wikimedia.org/wikipedia/commons/thumb/5/55/Bills_and_coins.svg/32px-Bills_and_coins.svg.png 2x" data-file-width="960" data-file-height="465" /></span></span> </span><a href="/wiki/Portal:Money" title="Portal:Money">Money portal</a></li> <li><span class="nowrap"><span class="noviewer" typeof="mw:File"><a href="/wiki/File:Emblem-money.svg" class="mw-file-description"><img alt="icon" src="//upload.wikimedia.org/wikipedia/commons/thumb/f/f3/Emblem-money.svg/16px-Emblem-money.svg.png" decoding="async" width="16" height="16" class="mw-file-element" srcset="//upload.wikimedia.org/wikipedia/commons/thumb/f/f3/Emblem-money.svg/24px-Emblem-money.svg.png 1.5x, //upload.wikimedia.org/wikipedia/commons/thumb/f/f3/Emblem-money.svg/32px-Emblem-money.svg.png 2x" data-file-width="48" data-file-height="48" /></a></span> </span><a href="/wiki/Portal:Business" title="Portal:Business">Business portal</a></li></ul></td></tr><tr><td class="sidebar-navbar"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1129693374"><style data-mw-deduplicate="TemplateStyles:r1239400231">.mw-parser-output .navbar{display:inline;font-size:88%;font-weight:normal}.mw-parser-output .navbar-collapse{float:left;text-align:left}.mw-parser-output .navbar-boxtext{word-spacing:0}.mw-parser-output .navbar ul{display:inline-block;white-space:nowrap;line-height:inherit}.mw-parser-output .navbar-brackets::before{margin-right:-0.125em;content:"[ "}.mw-parser-output .navbar-brackets::after{margin-left:-0.125em;content:" ]"}.mw-parser-output .navbar li{word-spacing:-0.125em}.mw-parser-output .navbar a>span,.mw-parser-output .navbar a>abbr{text-decoration:inherit}.mw-parser-output .navbar-mini abbr{font-variant:small-caps;border-bottom:none;text-decoration:none;cursor:inherit}.mw-parser-output .navbar-ct-full{font-size:114%;margin:0 7em}.mw-parser-output .navbar-ct-mini{font-size:114%;margin:0 4em}html.skin-theme-clientpref-night .mw-parser-output .navbar li a abbr{color:var(--color-base)!important}@media(prefers-color-scheme:dark){html.skin-theme-clientpref-os .mw-parser-output .navbar li a abbr{color:var(--color-base)!important}}@media print{.mw-parser-output .navbar{display:none!important}}</style><div class="navbar plainlinks hlist navbar-mini"><ul><li class="nv-view"><a href="/wiki/Template:Macroeconomics_sidebar" title="Template:Macroeconomics sidebar"><abbr title="View this template">v</abbr></a></li><li class="nv-talk"><a href="/wiki/Template_talk:Macroeconomics_sidebar" title="Template talk:Macroeconomics sidebar"><abbr title="Discuss this template">t</abbr></a></li><li class="nv-edit"><a href="/wiki/Special:EditPage/Template:Macroeconomics_sidebar" title="Special:EditPage/Template:Macroeconomics sidebar"><abbr title="Edit this template">e</abbr></a></li></ul></div></td></tr></tbody></table> <p>The <b>Keynesian cross diagram</b> is a formulation of the central ideas in Keynes' <i><a href="/wiki/The_General_Theory_of_Employment,_Interest_and_Money" title="The General Theory of Employment, Interest and Money">General Theory of Employment, Interest and Money</a></i>. It first appeared as a central component of macroeconomic theory as it was taught by <a href="/wiki/Paul_Samuelson" title="Paul Samuelson">Paul Samuelson</a> in his textbook, <i><a href="/wiki/Economics_(textbook)" title="Economics (textbook)">Economics: An Introductory Analysis</a></i>. The Keynesian cross plots <a href="/wiki/Aggregate_income" title="Aggregate income">aggregate income</a> (labelled as Y on the horizontal axis) and <a href="/wiki/Government_spending" title="Government spending">planned total spending</a> or aggregate expenditure (labelled as AD on the vertical axis).<sup id="cite_ref-1" class="reference"><a href="#cite_note-1"><span class="cite-bracket">[</span>1<span class="cite-bracket">]</span></a></sup> </p> <meta property="mw:PageProp/toc" /> <div class="mw-heading mw-heading2"><h2 id="Overview">Overview</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Keynesian_cross&action=edit&section=1" title="Edit section: Overview"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>In the Keynesian cross diagram, the upward sloping blue line represents the aggregate expenditure for goods and services by all households and firms as a function of their income. The 45-degree line represents an aggregate supply curve which embodies the idea that, as long as the economy is operating at less than full employment, anything demanded will be supplied. Aggregate expenditure and aggregate income are measured by dividing the money value of all goods produced in the economy in a given year by a price index. The resulting construct is referred to as <a href="/wiki/Real_Gross_Domestic_Product" class="mw-redirect" title="Real Gross Domestic Product">Real Gross Domestic Product</a>. </p><p>The sum of all incomes earned in the economy in a given period of time is identically equal to the sum of all expenditures, an identity resulting from the <a href="/wiki/Circular_flow_of_income" title="Circular flow of income">circular flow of income</a>. But not all expenditures are planned. For example, if an automobile plant produces 1,000 cars, but not all of them are sold, the unsold cars are labelled as <a href="/wiki/Inventory_investment" title="Inventory investment">inventory investment</a> in the GDP accounts. The income earned by the people who produced those cars is part of aggregate income and the value of all of the cars produced is part of total expenditure. But only the value of the cars that are sold is part of planned aggregate expenditure. </p><p>In the diagram, the <a href="/wiki/Economic_equilibrium" title="Economic equilibrium">equilibrium</a> level of income and expenditure is determined where the aggregate demand curve intersects the 45-degree line. At this point there is no unintended accumulation of inventories. The equilibrium point is labelled as <i>Y<span class="nowrap" style="padding-left:0.1em;">'</span></i>. Under standard assumptions about the determinants of aggregate expenditure, the AD curve is flatter than the 45-degree line and the equilibrium level of income, <i>Y<span class="nowrap" style="padding-left:0.1em;">'</span></i>, is stable. If income is less than <i>Y<span class="nowrap" style="padding-left:0.1em;">'</span></i>, aggregate expenditure exceeds aggregate income and firms will find that their inventories are falling. They will hire more workers, and incomes will increase causing a movement back towards <i>Y<span class="nowrap" style="padding-left:0.1em;">'</span></i>. Conversely, if income is greater than <i>Y<span class="nowrap" style="padding-left:0.1em;">'</span></i>, aggregate expenditure is less than aggregate income and firms will find that inventories are increasing. They will fire workers, and incomes will fall. <i>Y<span class="nowrap" style="padding-left:0.1em;">'</span></i> is the only level of income at which there is no desire on the part of firms to change the number of people they employ. </p><p>Aggregate employment is determined by the demand for labor as firms hire or fire workers to recruit enough labor to produce the goods demanded to meet aggregate expenditure. In Keynesian economic theory, equilibrium is typically assumed to occur at less than full employment, an assumption that is justified by appealing to the empirical connection between employment and output known as <a href="/wiki/Okun%27s_law" title="Okun's law">Okun's law</a>. </p><p>Aggregate expenditure can be broken down into four component parts. These consist of consumption expenditure <i>C</i>, planned investment expenditure, <i>I</i><sub>p</sub>, government expenditure on goods and services, <i>G</i> and exports net of imports, <i>NX</i>. In the simplest exposition of Keynesian theory, the economy is assumed to be <a href="/wiki/Autarky" title="Autarky">closed</a> (which implies that <i>NX</i> = 0), and planned investment is exogenous and determined by the <a href="/wiki/Animal_spirits_(Keynes)" title="Animal spirits (Keynes)">animal spirits</a> of investors. Consumption is an <a href="/wiki/Affine_function" class="mw-redirect" title="Affine function">affine function</a> of income, <i>C = a + bY</i> where the slope coefficient <i>b</i> is called the <a href="/wiki/Marginal_propensity_to_consume" title="Marginal propensity to consume">marginal propensity to consume</a>. If any of the components of aggregate demand, <i>a, I</i><sub>p</sub> or <i>G</i> rises, for a given level of income, <i>Y</i>, the aggregate demand curve shifts up and the intersection of the AD curve with the 45-degree line shifts right. Similarly, if any of these three components falls, the AD curve shifts down and the intersection of the AD curve with the 45-degree line shifts left. In the <i>General Theory</i>, Keynes explained the <a href="/wiki/Great_Depression" title="Great Depression">Great Depression</a> as a downward shift of the AD curve caused by a loss of business confidence and a collapse in planned investment.<sup id="cite_ref-2" class="reference"><a href="#cite_note-2"><span class="cite-bracket">[</span>2<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading2"><h2 id="Original_formulation">Original formulation</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Keynesian_cross&action=edit&section=2" title="Edit section: Original formulation"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>The Keynesian cross is a simplification of the ideas contained in the first four chapters of the <i><a href="/wiki/The_General_Theory_of_Employment,_Interest_and_Money" title="The General Theory of Employment, Interest and Money">General Theory</a></i>. It differs in several significant ways from the original formulation. In its original formulation, Keynes envisaged a pair of functions that he referred to as an aggregate demand and an aggregate supply function. But unlike the formulation in Samuelson's textbook, these were not relationships between real aggregate expenditure and real aggregate income. They were envisaged as relationships connecting GDP and the volume of employment. Keynes devoted an entire chapter of the <i><a href="/wiki/The_General_Theory_of_Employment,_Interest_and_Money" title="The General Theory of Employment, Interest and Money">General Theory</a></i>, chapter 4, to the choice of units. In the book, he uses only two units: money units and labor hours. GDP can be unambiguously measured in monetary units such as dollars or euro, but we cannot add up tons of steel and kilos of oranges. Keynes acknowledged that labor is not homogenous, but he proposed to solve that problem by arguing that if a brain surgeon is paid ten times more than a garbage collector then the brain surgeon is supplying ten times as many "effective units" of labor. This construction leads to an alternative formulation of the measurement of GDP that can be constructed by dividing the dollar value of all the goods and services produced in a given year by a measure of the money wage.<sup id="cite_ref-3" class="reference"><a href="#cite_note-3"><span class="cite-bracket">[</span>3<span class="cite-bracket">]</span></a></sup> </p><p>In the original formulation of Keynesian economics in the <i><a href="/wiki/The_General_Theory_of_Employment,_Interest_and_Money" title="The General Theory of Employment, Interest and Money">General Theory</a></i>, Keynes abandoned the classical concept that the demand and supply of labor are always equal and instead, he simply dropped the labor supply curve from his analysis.<sup id="cite_ref-4" class="reference"><a href="#cite_note-4"><span class="cite-bracket">[</span>4<span class="cite-bracket">]</span></a></sup> The failure of Keynes to provide an alternative micro-foundation to his theory led to widespread disagreement about the intellectual foundations of Keynesian Economics.<sup class="noprint Inline-Template Template-Fact" style="white-space:nowrap;">[<i><a href="/wiki/Wikipedia:Citation_needed" title="Wikipedia:Citation needed"><span title="This claim needs references to reliable sources. (October 2024)">citation needed</span></a></i>]</sup> </p> <div class="mw-heading mw-heading2"><h2 id="Assumptions">Assumptions</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Keynesian_cross&action=edit&section=3" title="Edit section: Assumptions"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>The Keynesian cross produces an equilibrium under several assumptions. First, the AD (blue) curve is positive. The AD curve is assumed to be positive because an increase in national output should lead to an increase in disposable income and, thus, an increase in consumption, which makes up a portion of aggregate demand.<sup id="cite_ref-Suranovic_5-0" class="reference"><a href="#cite_note-Suranovic-5"><span class="cite-bracket">[</span>5<span class="cite-bracket">]</span></a></sup> Second, the AD curve is assumed to have a positive, vertical intercept. The <i>AD</i> curve must have a positive, vertical intercept to cross the <i>AD=Y</i> curve. If the curves do not cross, there is no equilibrium and no equilibrium output can be determined. The AD curve will have a positive, vertical intercept as long as there is some aggregated demand—from <a href="/wiki/Consumer_spending" title="Consumer spending">consumer spending</a>, investment, net exports, or government spending—even if there is no national output.<sup id="cite_ref-Suranovic_5-1" class="reference"><a href="#cite_note-Suranovic-5"><span class="cite-bracket">[</span>5<span class="cite-bracket">]</span></a></sup> The slope of the AD curve is steeper given a high <a href="/wiki/Fiscal_multiplier" title="Fiscal multiplier">multiplier</a> value.<sup id="cite_ref-6" class="reference"><a href="#cite_note-6"><span class="cite-bracket">[</span>6<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading2"><h2 id="Mathematical_formulation">Mathematical formulation</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Keynesian_cross&action=edit&section=4" title="Edit section: Mathematical formulation"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>The Keynesian cross can be demonstrated through the following system of equations: </p><p>Start with a linear aggregate-expenditure function: </p><p><span class="mwe-math-element"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle AE=AE_{0}+bY\;,\;1>b>0\;,}"> <semantics> <mrow class="MJX-TeXAtom-ORD"> <mstyle displaystyle="true" scriptlevel="0"> <mi>A</mi> <mi>E</mi> <mo>=</mo> <mi>A</mi> <msub> <mi>E</mi> <mrow class="MJX-TeXAtom-ORD"> <mn>0</mn> </mrow> </msub> <mo>+</mo> <mi>b</mi> <mi>Y</mi> <mspace width="thickmathspace" /> <mo>,</mo> <mspace width="thickmathspace" /> <mn>1</mn> <mo>></mo> <mi>b</mi> <mo>></mo> <mn>0</mn> <mspace width="thickmathspace" /> <mo>,</mo> </mstyle> </mrow> <annotation encoding="application/x-tex">{\displaystyle AE=AE_{0}+bY\;,\;1>b>0\;,}</annotation> </semantics> </math></span><img src="https://wikimedia.org/api/rest_v1/media/math/render/svg/bc4c56b21a00394a6055710c396df6ba8a0e83f7" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.671ex; width:29.877ex; height:2.509ex;" alt="{\displaystyle AE=AE_{0}+bY\;,\;1>b>0\;,}"></span> </p><p>With the corresponding angle: </p><p><span class="mwe-math-element"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle \theta =\tan ^{-1}(b)\;.}"> <semantics> <mrow class="MJX-TeXAtom-ORD"> <mstyle displaystyle="true" scriptlevel="0"> <mi>θ</mi> <mo>=</mo> <msup> <mi>tan</mi> <mrow class="MJX-TeXAtom-ORD"> <mo>−</mo> <mn>1</mn> </mrow> </msup> <mo>⁡</mo> <mo stretchy="false">(</mo> <mi>b</mi> <mo stretchy="false">)</mo> <mspace width="thickmathspace" /> <mo>.</mo> </mstyle> </mrow> <annotation encoding="application/x-tex">{\displaystyle \theta =\tan ^{-1}(b)\;.}</annotation> </semantics> </math></span><img src="https://wikimedia.org/api/rest_v1/media/math/render/svg/db9a4186f75641b4674a6a245767ed3c3a3eef11" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.838ex; width:13.98ex; height:3.176ex;" alt="{\displaystyle \theta =\tan ^{-1}(b)\;.}"></span> </p><p>Where <span class="mwe-math-element"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle AE}"> <semantics> <mrow class="MJX-TeXAtom-ORD"> <mstyle displaystyle="true" scriptlevel="0"> <mi>A</mi> <mi>E</mi> </mstyle> </mrow> <annotation encoding="application/x-tex">{\displaystyle AE}</annotation> </semantics> </math></span><img src="https://wikimedia.org/api/rest_v1/media/math/render/svg/8b8b728848dc9f343b077689150b495baf8c4ca3" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.338ex; width:3.519ex; height:2.176ex;" alt="{\displaystyle AE}"></span> is aggregate expenditures, <span class="mwe-math-element"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle AE_{0}}"> <semantics> <mrow class="MJX-TeXAtom-ORD"> <mstyle displaystyle="true" scriptlevel="0"> <mi>A</mi> <msub> <mi>E</mi> <mrow class="MJX-TeXAtom-ORD"> <mn>0</mn> </mrow> </msub> </mstyle> </mrow> <annotation encoding="application/x-tex">{\displaystyle AE_{0}}</annotation> </semantics> </math></span><img src="https://wikimedia.org/api/rest_v1/media/math/render/svg/d3d4364cffab67248f81c0c00482179b13b10a3b" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.671ex; width:4.513ex; height:2.509ex;" alt="{\displaystyle AE_{0}}"></span> is autonomous expenditures (<a href="/wiki/Injection_(economics)" title="Injection (economics)">injections</a>), <span class="mwe-math-element"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle b}"> <semantics> <mrow class="MJX-TeXAtom-ORD"> <mstyle displaystyle="true" scriptlevel="0"> <mi>b</mi> </mstyle> </mrow> <annotation encoding="application/x-tex">{\displaystyle b}</annotation> </semantics> </math></span><img src="https://wikimedia.org/api/rest_v1/media/math/render/svg/f11423fbb2e967f986e36804a8ae4271734917c3" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.338ex; width:0.998ex; height:2.176ex;" alt="{\displaystyle b}"></span> is the <a href="/wiki/Marginal_propensity_to_consume" title="Marginal propensity to consume"> marginal propensity to spend</a> (the fraction of additional income spent), and <span class="mwe-math-element"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle Y}"> <semantics> <mrow class="MJX-TeXAtom-ORD"> <mstyle displaystyle="true" scriptlevel="0"> <mi>Y</mi> </mstyle> </mrow> <annotation encoding="application/x-tex">{\displaystyle Y}</annotation> </semantics> </math></span><img src="https://wikimedia.org/api/rest_v1/media/math/render/svg/961d67d6b454b4df2301ac571808a3538b3a6d3f" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.171ex; width:1.773ex; height:2.009ex;" alt="{\displaystyle Y}"></span> is national income (or economic output). Since <span class="mwe-math-element"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle b<1}"> <semantics> <mrow class="MJX-TeXAtom-ORD"> <mstyle displaystyle="true" scriptlevel="0"> <mi>b</mi> <mo><</mo> <mn>1</mn> </mstyle> </mrow> <annotation encoding="application/x-tex">{\displaystyle b<1}</annotation> </semantics> </math></span><img src="https://wikimedia.org/api/rest_v1/media/math/render/svg/474aaaee8d5178a7839515611341b818b060597a" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.338ex; width:5.258ex; height:2.176ex;" alt="{\displaystyle b<1}"></span> the angle of this line will always be less than 45 degrees. </p><p>Next, a 45 degree angle line representing the equality between aggregate expenditures and national income is introduced: </p><p><span class="mwe-math-element"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle AE=Y\;,}"> <semantics> <mrow class="MJX-TeXAtom-ORD"> <mstyle displaystyle="true" scriptlevel="0"> <mi>A</mi> <mi>E</mi> <mo>=</mo> <mi>Y</mi> <mspace width="thickmathspace" /> <mo>,</mo> </mstyle> </mrow> <annotation encoding="application/x-tex">{\displaystyle AE=Y\;,}</annotation> </semantics> </math></span><img src="https://wikimedia.org/api/rest_v1/media/math/render/svg/173ce44bbbb8dd0511ca0ed2586446caad4f3879" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.671ex; width:9.682ex; height:2.509ex;" alt="{\displaystyle AE=Y\;,}"></span> </p><p>The vertical intercept of this line is 0 while the slope is 1. Hence, the angle of this second line is: </p><p><span class="mwe-math-element"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle \theta =\tan ^{-1}(1)=45^{\circ }\;.}"> <semantics> <mrow class="MJX-TeXAtom-ORD"> <mstyle displaystyle="true" scriptlevel="0"> <mi>θ</mi> <mo>=</mo> <msup> <mi>tan</mi> <mrow class="MJX-TeXAtom-ORD"> <mo>−</mo> <mn>1</mn> </mrow> </msup> <mo>⁡</mo> <mo stretchy="false">(</mo> <mn>1</mn> <mo stretchy="false">)</mo> <mo>=</mo> <msup> <mn>45</mn> <mrow class="MJX-TeXAtom-ORD"> <mo>∘</mo> </mrow> </msup> <mspace width="thickmathspace" /> <mo>.</mo> </mstyle> </mrow> <annotation encoding="application/x-tex">{\displaystyle \theta =\tan ^{-1}(1)=45^{\circ }\;.}</annotation> </semantics> </math></span><img src="https://wikimedia.org/api/rest_v1/media/math/render/svg/0b9a2cfbffc8f714ac08d1a4a892a6d6bfb110c0" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.838ex; width:20.623ex; height:3.176ex;" alt="{\displaystyle \theta =\tan ^{-1}(1)=45^{\circ }\;.}"></span> </p><p>In accordance with economic equilibrium, to find the point of intersection (denoted using <span class="mwe-math-element"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle Y^{*}}"> <semantics> <mrow class="MJX-TeXAtom-ORD"> <mstyle displaystyle="true" scriptlevel="0"> <msup> <mi>Y</mi> <mrow class="MJX-TeXAtom-ORD"> <mo>∗</mo> </mrow> </msup> </mstyle> </mrow> <annotation encoding="application/x-tex">{\displaystyle Y^{*}}</annotation> </semantics> </math></span><img src="https://wikimedia.org/api/rest_v1/media/math/render/svg/5df6b56e280c170dd2e9844b966dd0f1aeb12ea0" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.171ex; width:2.954ex; height:2.176ex;" alt="{\displaystyle Y^{*}}"></span>) between the two lines when both equations are satisfied, we set aggregate expenditures equal to the equilibrium level of income: </p><p><span class="mwe-math-element"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle Y^{*}=AE_{0}+bY\;,}"> <semantics> <mrow class="MJX-TeXAtom-ORD"> <mstyle displaystyle="true" scriptlevel="0"> <msup> <mi>Y</mi> <mrow class="MJX-TeXAtom-ORD"> <mo>∗</mo> </mrow> </msup> <mo>=</mo> <mi>A</mi> <msub> <mi>E</mi> <mrow class="MJX-TeXAtom-ORD"> <mn>0</mn> </mrow> </msub> <mo>+</mo> <mi>b</mi> <mi>Y</mi> <mspace width="thickmathspace" /> <mo>,</mo> </mstyle> </mrow> <annotation encoding="application/x-tex">{\displaystyle Y^{*}=AE_{0}+bY\;,}</annotation> </semantics> </math></span><img src="https://wikimedia.org/api/rest_v1/media/math/render/svg/b327c012a018c2e9d39edfcb5c95544b6958a26e" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.671ex; width:17.469ex; height:2.676ex;" alt="{\displaystyle Y^{*}=AE_{0}+bY\;,}"></span> </p><p>Since <span class="mwe-math-element"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle Y=Y^{*}}"> <semantics> <mrow class="MJX-TeXAtom-ORD"> <mstyle displaystyle="true" scriptlevel="0"> <mi>Y</mi> <mo>=</mo> <msup> <mi>Y</mi> <mrow class="MJX-TeXAtom-ORD"> <mo>∗</mo> </mrow> </msup> </mstyle> </mrow> <annotation encoding="application/x-tex">{\displaystyle Y=Y^{*}}</annotation> </semantics> </math></span><img src="https://wikimedia.org/api/rest_v1/media/math/render/svg/d1f2a5e717519b5dbdd1ed9f56a3c2d379a14e2f" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.171ex; width:7.826ex; height:2.176ex;" alt="{\displaystyle Y=Y^{*}}"></span> when we isolate <span class="mwe-math-element"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle Y^{*}}"> <semantics> <mrow class="MJX-TeXAtom-ORD"> <mstyle displaystyle="true" scriptlevel="0"> <msup> <mi>Y</mi> <mrow class="MJX-TeXAtom-ORD"> <mo>∗</mo> </mrow> </msup> </mstyle> </mrow> <annotation encoding="application/x-tex">{\displaystyle Y^{*}}</annotation> </semantics> </math></span><img src="https://wikimedia.org/api/rest_v1/media/math/render/svg/5df6b56e280c170dd2e9844b966dd0f1aeb12ea0" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.171ex; width:2.954ex; height:2.176ex;" alt="{\displaystyle Y^{*}}"></span> , we get the equilibrium condition: </p><p><span class="mwe-math-element"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle Y^{*}={\frac {1}{1-b}}\cdot AE_{0}\;,}"> <semantics> <mrow class="MJX-TeXAtom-ORD"> <mstyle displaystyle="true" scriptlevel="0"> <msup> <mi>Y</mi> <mrow class="MJX-TeXAtom-ORD"> <mo>∗</mo> </mrow> </msup> <mo>=</mo> <mrow class="MJX-TeXAtom-ORD"> <mfrac> <mn>1</mn> <mrow> <mn>1</mn> <mo>−</mo> <mi>b</mi> </mrow> </mfrac> </mrow> <mo>⋅</mo> <mi>A</mi> <msub> <mi>E</mi> <mrow class="MJX-TeXAtom-ORD"> <mn>0</mn> </mrow> </msub> <mspace width="thickmathspace" /> <mo>,</mo> </mstyle> </mrow> <annotation encoding="application/x-tex">{\displaystyle Y^{*}={\frac {1}{1-b}}\cdot AE_{0}\;,}</annotation> </semantics> </math></span><img src="https://wikimedia.org/api/rest_v1/media/math/render/svg/b5a5f4270bd064f226b5c2c1dfd992ba6bd2d199" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -2.171ex; width:19.373ex; height:5.509ex;" alt="{\displaystyle Y^{*}={\frac {1}{1-b}}\cdot AE_{0}\;,}"></span> </p><p><span class="mwe-math-element"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle 1>b>0\Rightarrow k>1\;.}"> <semantics> <mrow class="MJX-TeXAtom-ORD"> <mstyle displaystyle="true" scriptlevel="0"> <mn>1</mn> <mo>></mo> <mi>b</mi> <mo>></mo> <mn>0</mn> <mo stretchy="false">⇒</mo> <mi>k</mi> <mo>></mo> <mn>1</mn> <mspace width="thickmathspace" /> <mo>.</mo> </mstyle> </mrow> <annotation encoding="application/x-tex">{\displaystyle 1>b>0\Rightarrow k>1\;.}</annotation> </semantics> </math></span><img src="https://wikimedia.org/api/rest_v1/media/math/render/svg/68ece51ab12c1673abe354042d78c98f4fc6fc95" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.338ex; width:19.898ex; height:2.176ex;" alt="{\displaystyle 1>b>0\Rightarrow k>1\;.}"></span> </p><p>Where <span class="mwe-math-element"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle k={\frac {1}{1-b}}}"> <semantics> <mrow class="MJX-TeXAtom-ORD"> <mstyle displaystyle="true" scriptlevel="0"> <mi>k</mi> <mo>=</mo> <mrow class="MJX-TeXAtom-ORD"> <mfrac> <mn>1</mn> <mrow> <mn>1</mn> <mo>−</mo> <mi>b</mi> </mrow> </mfrac> </mrow> </mstyle> </mrow> <annotation encoding="application/x-tex">{\displaystyle k={\frac {1}{1-b}}}</annotation> </semantics> </math></span><img src="https://wikimedia.org/api/rest_v1/media/math/render/svg/7fac4df4ab81bccc7e3411888a07183fa5f4bb1f" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -2.171ex; width:10.146ex; height:5.509ex;" alt="{\displaystyle k={\frac {1}{1-b}}}"></span> is the Keynesian <a href="/wiki/Multiplier_(economics)" title="Multiplier (economics)"> spending multiplier</a>. For every <span class="mwe-math-element"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle AE_{0}}"> <semantics> <mrow class="MJX-TeXAtom-ORD"> <mstyle displaystyle="true" scriptlevel="0"> <mi>A</mi> <msub> <mi>E</mi> <mrow class="MJX-TeXAtom-ORD"> <mn>0</mn> </mrow> </msub> </mstyle> </mrow> <annotation encoding="application/x-tex">{\displaystyle AE_{0}}</annotation> </semantics> </math></span><img src="https://wikimedia.org/api/rest_v1/media/math/render/svg/d3d4364cffab67248f81c0c00482179b13b10a3b" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.671ex; width:4.513ex; height:2.509ex;" alt="{\displaystyle AE_{0}}"></span> dollars injected into the economy, income increases by <span class="mwe-math-element"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle k>1}"> <semantics> <mrow class="MJX-TeXAtom-ORD"> <mstyle displaystyle="true" scriptlevel="0"> <mi>k</mi> <mo>></mo> <mn>1</mn> </mstyle> </mrow> <annotation encoding="application/x-tex">{\displaystyle k>1}</annotation> </semantics> </math></span><img src="https://wikimedia.org/api/rest_v1/media/math/render/svg/5cda43bd4034dc2d04cd562005d0af81d3d2dbc6" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.338ex; width:5.472ex; height:2.176ex;" alt="{\displaystyle k>1}"></span> times that amount. </p><p>If <span class="mwe-math-element"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle b=1}"> <semantics> <mrow class="MJX-TeXAtom-ORD"> <mstyle displaystyle="true" scriptlevel="0"> <mi>b</mi> <mo>=</mo> <mn>1</mn> </mstyle> </mrow> <annotation encoding="application/x-tex">{\displaystyle b=1}</annotation> </semantics> </math></span><img src="https://wikimedia.org/api/rest_v1/media/math/render/svg/3f55bc77dec8088791b5c1ed51e634cc1b431fd0" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.338ex; width:5.258ex; height:2.176ex;" alt="{\displaystyle b=1}"></span>, the spending multiplier, and hence the equilibrium condition becomes undefined via division by zero. Another reason why the equilibrium condition becomes undefined is because both lines would be at 45 degree angles, and therefore <a href="/wiki/Parallel_(geometry)" title="Parallel (geometry)">never intersect</a> or produce an equilibrium. On the other hand, when <span class="mwe-math-element"><span class="mwe-math-mathml-inline mwe-math-mathml-a11y" style="display: none;"><math xmlns="http://www.w3.org/1998/Math/MathML" alttext="{\displaystyle b<1}"> <semantics> <mrow class="MJX-TeXAtom-ORD"> <mstyle displaystyle="true" scriptlevel="0"> <mi>b</mi> <mo><</mo> <mn>1</mn> </mstyle> </mrow> <annotation encoding="application/x-tex">{\displaystyle b<1}</annotation> </semantics> </math></span><img src="https://wikimedia.org/api/rest_v1/media/math/render/svg/474aaaee8d5178a7839515611341b818b060597a" class="mwe-math-fallback-image-inline mw-invert skin-invert" aria-hidden="true" style="vertical-align: -0.338ex; width:5.258ex; height:2.176ex;" alt="{\displaystyle b<1}"></span>, an equilibrium can be found. </p> <div class="mw-heading mw-heading2"><h2 id="See_also">See also</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Keynesian_cross&action=edit&section=5" title="Edit section: See also"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <ul><li><a href="/wiki/AD%E2%80%93AS_model" title="AD–AS model">AD–AS model</a></li> <li><a href="/wiki/IS%E2%80%93LM_model" title="IS–LM model">IS–LM model</a></li></ul> <div class="mw-heading mw-heading2"><h2 id="Notes">Notes</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Keynesian_cross&action=edit&section=6" title="Edit section: Notes"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <style data-mw-deduplicate="TemplateStyles:r1239543626">.mw-parser-output .reflist{margin-bottom:0.5em;list-style-type:decimal}@media screen{.mw-parser-output .reflist{font-size:90%}}.mw-parser-output .reflist .references{font-size:100%;margin-bottom:0;list-style-type:inherit}.mw-parser-output .reflist-columns-2{column-width:30em}.mw-parser-output .reflist-columns-3{column-width:25em}.mw-parser-output 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.id-lock-free.id-lock-free a{background:url("//upload.wikimedia.org/wikipedia/commons/6/65/Lock-green.svg")right 0.1em center/9px no-repeat}.mw-parser-output .id-lock-limited.id-lock-limited a,.mw-parser-output .id-lock-registration.id-lock-registration a{background:url("//upload.wikimedia.org/wikipedia/commons/d/d6/Lock-gray-alt-2.svg")right 0.1em center/9px no-repeat}.mw-parser-output .id-lock-subscription.id-lock-subscription a{background:url("//upload.wikimedia.org/wikipedia/commons/a/aa/Lock-red-alt-2.svg")right 0.1em center/9px no-repeat}.mw-parser-output .cs1-ws-icon a{background:url("//upload.wikimedia.org/wikipedia/commons/4/4c/Wikisource-logo.svg")right 0.1em center/12px no-repeat}body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-free a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-limited a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-registration a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-subscription a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .cs1-ws-icon a{background-size:contain;padding:0 1em 0 0}.mw-parser-output .cs1-code{color:inherit;background:inherit;border:none;padding:inherit}.mw-parser-output .cs1-hidden-error{display:none;color:var(--color-error,#d33)}.mw-parser-output .cs1-visible-error{color:var(--color-error,#d33)}.mw-parser-output .cs1-maint{display:none;color:#085;margin-left:0.3em}.mw-parser-output .cs1-kern-left{padding-left:0.2em}.mw-parser-output .cs1-kern-right{padding-right:0.2em}.mw-parser-output .citation .mw-selflink{font-weight:inherit}@media screen{.mw-parser-output .cs1-format{font-size:95%}html.skin-theme-clientpref-night .mw-parser-output .cs1-maint{color:#18911f}}@media screen and (prefers-color-scheme:dark){html.skin-theme-clientpref-os .mw-parser-output .cs1-maint{color:#18911f}}</style><cite class="citation web cs1"><a rel="nofollow" class="external text" href="https://texasgateway.org/resource/113-expenditure-output-or-keynesian-cross-model">"11.3 The Expenditure-Output or Keynesian Cross Model | Texas Gateway"</a>. <i>texasgateway.org</i><span class="reference-accessdate">. Retrieved <span class="nowrap">2024-10-25</span></span>.</cite><span title="ctx_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Ajournal&rft.genre=unknown&rft.jtitle=texasgateway.org&rft.atitle=11.3+The+Expenditure-Output+or+Keynesian+Cross+Model+%7C+Texas+Gateway&rft_id=https%3A%2F%2Ftexasgateway.org%2Fresource%2F113-expenditure-output-or-keynesian-cross-model&rfr_id=info%3Asid%2Fen.wikipedia.org%3AKeynesian+cross" class="Z3988"></span></span> </li> <li id="cite_note-2"><span class="mw-cite-backlink"><b><a href="#cite_ref-2">^</a></b></span> <span class="reference-text"><a rel="nofollow" class="external text" href="http://www.rogerfarmer.com/rogerfarmerblog/2014/02/a-quiz-for-wannabe-keynesians.html?rq=keynesian%20cross">My Quiz for Wannabee Keynesians</a></span> </li> <li id="cite_note-3"><span class="mw-cite-backlink"><b><a href="#cite_ref-3">^</a></b></span> <span class="reference-text"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1238218222"><cite id="CITEREFFarmer2010" class="citation book cs1">Farmer, Roger E. A. (2010). <a rel="nofollow" class="external text" href="https://books.google.com/books?id=liqqJwB90OEC&q=understand+data"><i>Expectations Employment and Prices</i></a>. New York, USA: Oxford University Press. p. 69. <a href="/wiki/ISBN_(identifier)" class="mw-redirect" title="ISBN (identifier)">ISBN</a> <a href="/wiki/Special:BookSources/978-0-19-539790-1" title="Special:BookSources/978-0-19-539790-1"><bdi>978-0-19-539790-1</bdi></a>.</cite><span title="ctx_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Abook&rft.genre=book&rft.btitle=Expectations+Employment+and+Prices&rft.place=New+York%2C+USA&rft.pages=69&rft.pub=Oxford+University+Press&rft.date=2010&rft.isbn=978-0-19-539790-1&rft.aulast=Farmer&rft.aufirst=Roger+E.+A.&rft_id=https%3A%2F%2Fbooks.google.com%2Fbooks%3Fid%3DliqqJwB90OEC%26q%3Dunderstand%2Bdata&rfr_id=info%3Asid%2Fen.wikipedia.org%3AKeynesian+cross" class="Z3988"></span></span> </li> <li id="cite_note-4"><span class="mw-cite-backlink"><b><a href="#cite_ref-4">^</a></b></span> <span class="reference-text"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1238218222"><cite id="CITEREFFarmer2008" class="citation journal cs1">Farmer, Roger E. A. (2008). <a rel="nofollow" class="external text" href="http://www.nber.org/papers/w13406.pdf">"Aggregate Demand and Supply"</a> <span class="cs1-format">(PDF)</span>. <i>International Journal of Economic Theory</i>. <b>4</b> (1): 77–93. <a href="/wiki/Doi_(identifier)" class="mw-redirect" title="Doi (identifier)">doi</a>:<a rel="nofollow" class="external text" href="https://doi.org/10.1111%2Fj.1742-7363.2007.00069.x">10.1111/j.1742-7363.2007.00069.x</a>. <a href="/wiki/S2CID_(identifier)" class="mw-redirect" title="S2CID (identifier)">S2CID</a> <a rel="nofollow" class="external text" href="https://api.semanticscholar.org/CorpusID:17567943">17567943</a>.</cite><span title="ctx_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Ajournal&rft.genre=article&rft.jtitle=International+Journal+of+Economic+Theory&rft.atitle=Aggregate+Demand+and+Supply&rft.volume=4&rft.issue=1&rft.pages=77-93&rft.date=2008&rft_id=info%3Adoi%2F10.1111%2Fj.1742-7363.2007.00069.x&rft_id=https%3A%2F%2Fapi.semanticscholar.org%2FCorpusID%3A17567943%23id-name%3DS2CID&rft.aulast=Farmer&rft.aufirst=Roger+E.+A.&rft_id=http%3A%2F%2Fwww.nber.org%2Fpapers%2Fw13406.pdf&rfr_id=info%3Asid%2Fen.wikipedia.org%3AKeynesian+cross" class="Z3988"></span></span> </li> <li id="cite_note-Suranovic-5"><span class="mw-cite-backlink">^ <a href="#cite_ref-Suranovic_5-0"><sup><i><b>a</b></i></sup></a> <a href="#cite_ref-Suranovic_5-1"><sup><i><b>b</b></i></sup></a></span> <span class="reference-text">Suranovic, Steven M. "Chapter 50-7: The Keynesian Cross Diagram." <i>International Finance Theory and Policy</i>. Last Updated on 1/20/05 <a rel="nofollow" class="external free" href="http://internationalecon.com/Finance/Fch50/F50-7.php">http://internationalecon.com/Finance/Fch50/F50-7.php</a></span> </li> <li id="cite_note-6"><span class="mw-cite-backlink"><b><a href="#cite_ref-6">^</a></b></span> <span class="reference-text"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1238218222"><cite id="CITEREFSnowdonVane2005" class="citation book cs1">Snowdon, Brian; Vane, Howard R. (2005). <a rel="nofollow" class="external text" href="https://books.google.com/books?id=z-c4AgAAQBAJ&pg=PA61"><i>Modern Macroeconomics: Its Origins, Development and Current State</i></a>. Cheltenham, UK: Edward Elgar. p. 61. <a href="/wiki/ISBN_(identifier)" class="mw-redirect" title="ISBN (identifier)">ISBN</a> <a href="/wiki/Special:BookSources/978-1-84542-467-1" title="Special:BookSources/978-1-84542-467-1"><bdi>978-1-84542-467-1</bdi></a>.</cite><span title="ctx_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Abook&rft.genre=book&rft.btitle=Modern+Macroeconomics%3A+Its+Origins%2C+Development+and+Current+State&rft.place=Cheltenham%2C+UK&rft.pages=61&rft.pub=Edward+Elgar&rft.date=2005&rft.isbn=978-1-84542-467-1&rft.aulast=Snowdon&rft.aufirst=Brian&rft.au=Vane%2C+Howard+R.&rft_id=https%3A%2F%2Fbooks.google.com%2Fbooks%3Fid%3Dz-c4AgAAQBAJ%26pg%3DPA61&rfr_id=info%3Asid%2Fen.wikipedia.org%3AKeynesian+cross" class="Z3988"></span></span> </li> </ol></div></div> <div class="mw-heading mw-heading2"><h2 id="External_links">External links</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Keynesian_cross&action=edit&section=7" title="Edit section: External links"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <ul><li><a rel="nofollow" class="external text" href="https://web.archive.org/web/20190514225048/https://fgn.unisg.ch/eurmacro/tutor/c02.html">The Keynesian Cross</a> includes an applet that demonstrates the Keynesian cross and how it responds to changes in underlying parameters</li> <li><a rel="nofollow" class="external text" href="http://demonstrations.wolfram.com/KeynesianCrossDiagram/">Keynesian Cross Diagram</a> by Fiona Maclachlan, <a href="/wiki/The_Wolfram_Demonstrations_Project" class="mw-redirect" title="The Wolfram Demonstrations Project">The Wolfram Demonstrations Project</a>.</li> <li><a rel="nofollow" class="external text" href="http://www.rogerfarmer.com/rogerfarmerblog/2014/02/a-quiz-for-wannabe-keynesians.html?rq=keynesian%20cross">My Quiz for Wannabee Keynesians</a>, <i>Roger Farmer's 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economics">Organizational</a></li> <li><a href="/wiki/Economics_of_participation" title="Economics of participation">Participation</a></li> <li><a href="/wiki/Personnel_economics" title="Personnel economics">Personnel</a></li> <li><a href="/wiki/Economic_planning" title="Economic planning">Planning</a></li> <li><a href="/wiki/Economic_policy" title="Economic policy">Policy</a></li> <li><a href="/wiki/Public_economics" title="Public economics">Public</a></li> <li><a href="/wiki/Public_choice" title="Public choice">Public choice</a> / <a href="/wiki/Social_choice_theory" title="Social choice theory">Social choice theory</a></li> <li><a href="/wiki/Regional_economics" title="Regional economics">Regional</a></li> <li><a href="/wiki/Rural_economics" title="Rural economics">Rural</a></li> <li><a href="/wiki/Service_economy" title="Service economy">Service</a></li> <li><a href="/wiki/Socioeconomics" class="mw-redirect" title="Socioeconomics">Socio</a></li> <li><a href="/wiki/Economic_sociology" title="Economic sociology">Sociological</a></li> <li><a href="/wiki/Solidarity_economy" title="Solidarity economy">Solidarity</a></li> <li><a href="/wiki/Economic_statistics" title="Economic statistics">Statistics</a></li> <li><a href="/wiki/Urban_economics" title="Urban economics">Urban</a></li> <li><a href="/wiki/Welfare_economics" title="Welfare economics">Welfare</a></li></ul></div></div> </div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%"><div style="display: inline-block; line-height: 1.2em; padding: .1em 0;"><a href="/wiki/Schools_of_economic_thought" title="Schools of economic thought">Schools</a><br />(<a href="/wiki/History_of_economic_thought" title="History of economic thought">history</a>)<br /></div></th><td class="navbox-list-with-group navbox-list navbox-even" style="width:100%;padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Mainstream_economics" title="Mainstream economics">Mainstream</a></li> <li><a href="/wiki/Heterodox_economics" title="Heterodox economics">Heterodox</a></li> <li><a href="/wiki/American_School_(economics)" title="American School (economics)">American (National)</a></li> <li><a href="/wiki/Ancient_economic_thought" title="Ancient economic thought">Ancient thought</a></li> <li><a href="/wiki/Anarchist_economics" class="mw-redirect" title="Anarchist economics">Anarchist</a> <ul><li><a href="/wiki/Mutualism_(economic_theory)" title="Mutualism (economic theory)">Mutualism</a></li></ul></li> <li><a href="/wiki/Austrian_School" class="mw-redirect" title="Austrian School">Austrian</a></li> <li><a href="/wiki/Behavioral_economics" title="Behavioral economics">Behavioral</a></li> <li><a href="/wiki/Buddhist_economics" title="Buddhist economics">Buddhist</a></li> <li><a href="/wiki/Chartalism" title="Chartalism">Chartalism</a> <ul><li><a href="/wiki/Modern_monetary_theory" title="Modern monetary theory">Modern monetary theory</a></li></ul></li> <li><a href="/wiki/Chicago_school_of_economics" title="Chicago school of economics">Chicago</a></li> <li><a href="/wiki/Classical_economics" title="Classical economics">Classical</a></li> <li><a href="/wiki/Critique_of_political_economy" title="Critique of political economy">Critique of political economy</a></li> <li><a href="/wiki/Economic_democracy" title="Economic democracy">Democratic</a></li> <li><a href="/wiki/Disequilibrium_macroeconomics" title="Disequilibrium macroeconomics">Disequilibrium</a></li> <li><a href="/wiki/Ecological_economics" title="Ecological economics">Ecological</a></li> <li><a href="/wiki/Evolutionary_economics" title="Evolutionary economics">Evolutionary</a></li> <li><a href="/wiki/Feminist_economics" title="Feminist economics">Feminist</a></li> <li><a href="/wiki/Georgism" title="Georgism">Georgism</a></li> <li><a href="/wiki/Happiness_economics" title="Happiness economics">Happiness</a></li> <li><a href="/wiki/Historical_school_of_economics" title="Historical school of economics">Historical</a></li> <li><a href="/wiki/Humanistic_economics" title="Humanistic economics">Humanistic</a></li> <li><a href="/wiki/Institutional_economics" title="Institutional economics">Institutional</a></li> <li><a href="/wiki/Keynesian_economics" title="Keynesian economics">Keynesian</a> <ul><li><a href="/wiki/Neo-Keynesian_economics" class="mw-redirect" title="Neo-Keynesian economics">Neo-</a> (<a href="/wiki/Neoclassical_synthesis" title="Neoclassical synthesis">neoclassical–Keynesian synthesis</a>)</li> <li><a href="/wiki/New_Keynesian_economics" title="New Keynesian economics">New</a></li> <li><a href="/wiki/Post-Keynesian_economics" title="Post-Keynesian economics">Post-</a> <ul><li><a href="/wiki/Monetary_circuit_theory" title="Monetary circuit theory">Circuitism</a></li></ul></li></ul></li> <li><a href="/wiki/Malthusianism" title="Malthusianism">Malthusianism</a></li> <li><a href="/wiki/Marginalism" title="Marginalism">Marginalism</a></li> <li><a href="/wiki/Marxian_economics" title="Marxian economics">Marxian</a> <ul><li><a href="/wiki/Neo-Marxian_economics" class="mw-redirect" title="Neo-Marxian economics">Neo-</a></li></ul></li> <li><a href="/wiki/Mercantilism" title="Mercantilism">Mercantilism</a></li> <li><a href="/wiki/Mixed_economy" title="Mixed economy">Mixed</a></li> <li><a href="/wiki/Neoclassical_economics" title="Neoclassical economics">Neoclassical</a> <ul><li><a href="/wiki/Lausanne_School" title="Lausanne School">Lausanne</a></li></ul></li> <li><a href="/wiki/New_classical_macroeconomics" title="New classical macroeconomics">New classical</a> <ul><li><a href="/wiki/Real_business-cycle_theory" title="Real business-cycle theory">Real business-cycle theory</a></li></ul></li> <li><a href="/wiki/New_institutional_economics" title="New institutional economics">New institutional</a></li> <li><a href="/wiki/Physiocracy" title="Physiocracy">Physiocracy</a></li> <li><a href="/wiki/Socialist_economics" title="Socialist economics">Socialist</a></li> <li><a href="/wiki/Stockholm_School_(economics)" title="Stockholm School (economics)">Stockholm</a></li> <li><a href="/wiki/Supply-side_economics" title="Supply-side economics">Supply-side</a></li> <li><a href="/wiki/Thermoeconomics" title="Thermoeconomics">Thermo</a></li></ul> </div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%"><div style="display: inline-block; line-height: 1.2em; padding: .1em 0;"><a href="/wiki/Economist" title="Economist">Economists</a><br /></div></th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Bernard_de_Mandeville" class="mw-redirect" title="Bernard de Mandeville">de Mandeville</a></li> <li><a href="/wiki/Fran%C3%A7ois_Quesnay" title="François Quesnay">Quesnay</a></li> <li><a href="/wiki/Adam_Smith" title="Adam Smith">Smith</a></li> <li><a href="/wiki/Thomas_Robert_Malthus" title="Thomas Robert Malthus">Malthus</a></li> <li><a href="/wiki/Jean-Baptiste_Say" title="Jean-Baptiste Say">Say</a></li> <li><a href="/wiki/David_Ricardo" title="David Ricardo">Ricardo</a></li> <li><a href="/wiki/Johann_Heinrich_von_Th%C3%BCnen" title="Johann Heinrich von Thünen">von Thünen</a></li> <li><a href="/wiki/Friedrich_List" title="Friedrich List">List</a></li> <li><a href="/wiki/Fr%C3%A9d%C3%A9ric_Bastiat" title="Frédéric Bastiat">Bastiat</a></li> <li><a href="/wiki/Antoine_Augustin_Cournot" title="Antoine Augustin Cournot">Cournot</a></li> <li><a href="/wiki/John_Stuart_Mill" title="John Stuart Mill">Mill</a></li> <li><a href="/wiki/Hermann_Heinrich_Gossen" title="Hermann Heinrich Gossen">Gossen</a></li> <li><a href="/wiki/Karl_Marx" title="Karl Marx">Marx</a></li> <li><a href="/wiki/L%C3%A9on_Walras" title="Léon Walras">Walras</a></li> <li><a href="/wiki/William_Stanley_Jevons" title="William Stanley Jevons">Jevons</a></li> <li><a href="/wiki/Henry_George" title="Henry George">George</a></li> <li><a href="/wiki/Carl_Menger" title="Carl Menger">Menger</a></li> <li><a href="/wiki/Alfred_Marshall" title="Alfred Marshall">Marshall</a></li> <li><a href="/wiki/Francis_Ysidro_Edgeworth" title="Francis Ysidro Edgeworth">Edgeworth</a></li> <li><a href="/wiki/John_Bates_Clark" title="John Bates Clark">Clark</a></li> <li><a href="/wiki/Vilfredo_Pareto" title="Vilfredo Pareto">Pareto</a></li> <li><a href="/wiki/Eugen_von_B%C3%B6hm-Bawerk" title="Eugen von Böhm-Bawerk">von Böhm-Bawerk</a></li> <li><a href="/wiki/Friedrich_von_Wieser" title="Friedrich von Wieser">von Wieser</a></li> <li><a href="/wiki/Thorstein_Veblen" title="Thorstein Veblen">Veblen</a></li> <li><a href="/wiki/Irving_Fisher" title="Irving Fisher">Fisher</a></li> <li><a href="/wiki/Arthur_Cecil_Pigou" title="Arthur Cecil Pigou">Pigou</a></li> <li><a href="/wiki/Eli_Heckscher" title="Eli Heckscher">Heckscher</a></li> <li><a href="/wiki/Ludwig_von_Mises" title="Ludwig von Mises">von Mises</a></li> <li><a href="/wiki/Joseph_Schumpeter" title="Joseph Schumpeter">Schumpeter</a></li> <li><a href="/wiki/John_Maynard_Keynes" title="John Maynard Keynes">Keynes</a></li> <li><a href="/wiki/Frank_Knight" title="Frank Knight">Knight</a></li> <li><a href="/wiki/Karl_Polanyi" title="Karl Polanyi">Polanyi</a></li> <li><a href="/wiki/Ragnar_Frisch" title="Ragnar Frisch">Frisch</a></li> <li><a href="/wiki/Piero_Sraffa" title="Piero Sraffa">Sraffa</a></li> <li><a href="/wiki/Gunnar_Myrdal" title="Gunnar Myrdal">Myrdal</a></li> <li><a href="/wiki/Friedrich_Hayek" title="Friedrich Hayek">Hayek</a></li> <li><a href="/wiki/Micha%C5%82_Kalecki" title="Michał Kalecki">Kalecki</a></li> <li><a href="/wiki/Wilhelm_R%C3%B6pke" title="Wilhelm Röpke">Röpke</a></li> <li><a href="/wiki/Simon_Kuznets" title="Simon Kuznets">Kuznets</a></li> <li><a href="/wiki/Jan_Tinbergen" title="Jan Tinbergen">Tinbergen</a></li> <li><a href="/wiki/Joan_Robinson" title="Joan Robinson">Robinson</a></li> <li><a href="/wiki/John_von_Neumann" title="John von Neumann">von Neumann</a></li> <li><a href="/wiki/John_Hicks" title="John Hicks">Hicks</a></li> <li><a href="/wiki/Oskar_R._Lange" title="Oskar R. Lange">Lange</a></li> <li><a href="/wiki/Wassily_Leontief" title="Wassily Leontief">Leontief</a></li> <li><a href="/wiki/John_Kenneth_Galbraith" title="John Kenneth Galbraith">Galbraith</a></li> <li><a href="/wiki/Tjalling_Koopmans" title="Tjalling Koopmans">Koopmans</a></li> <li><a href="/wiki/E._F._Schumacher" title="E. F. Schumacher">Schumacher</a></li> <li><a href="/wiki/Milton_Friedman" title="Milton Friedman">Friedman</a></li> <li><a href="/wiki/Paul_Samuelson" title="Paul Samuelson">Samuelson</a></li> <li><a href="/wiki/Herbert_A._Simon" title="Herbert A. Simon">Simon</a></li> <li><a href="/wiki/James_M._Buchanan" title="James M. Buchanan">Buchanan</a></li> <li><a href="/wiki/Kenneth_Arrow" title="Kenneth Arrow">Arrow</a></li> <li><a href="/wiki/William_Baumol" title="William Baumol">Baumol</a></li> <li><a href="/wiki/Robert_Solow" title="Robert Solow">Solow</a></li> <li><a href="/wiki/Murray_Rothbard" title="Murray Rothbard">Rothbard</a></li> <li><a href="/wiki/Alan_Greenspan" title="Alan Greenspan">Greenspan</a></li> <li><a href="/wiki/Thomas_Sowell" title="Thomas Sowell">Sowell</a></li> <li><a href="/wiki/Gary_Becker" title="Gary Becker">Becker</a></li> <li><a href="/wiki/Elinor_Ostrom" title="Elinor Ostrom">Ostrom</a></li> <li><a href="/wiki/Amartya_Sen" title="Amartya Sen">Sen</a></li> <li><a href="/wiki/Robert_Lucas_Jr." title="Robert Lucas Jr.">Lucas</a></li> <li><a href="/wiki/Joseph_Stiglitz" title="Joseph Stiglitz">Stiglitz</a></li> <li><a href="/wiki/Richard_Thaler" title="Richard Thaler">Thaler</a></li> <li><a href="/wiki/Hans-Hermann_Hoppe" title="Hans-Hermann Hoppe">Hoppe</a></li> <li><a href="/wiki/Paul_Krugman" title="Paul Krugman">Krugman</a></li> <li><a href="/wiki/Thomas_Piketty" title="Thomas Piketty">Piketty</a></li> <li><i><a href="/wiki/Category:Economists" title="Category:Economists">more</a></i></li></ul> </div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%"><a href="/wiki/Category:Economics_lists" title="Category:Economics lists">Lists</a></th><td class="navbox-list-with-group navbox-list navbox-even" style="width:100%;padding:0"><div style="padding:0 0.25em"><div class="excerpt-block"><div class="excerpt"> <ul><li><a href="/wiki/Glossary_of_economics" title="Glossary of economics">Glossary</a></li> <li><a href="/wiki/List_of_economists" title="List of economists">Economists</a></li> <li><a href="/wiki/List_of_important_publications_in_economics" title="List of important publications in economics">Publications</a> (<a href="/wiki/List_of_economics_journals" title="List of economics journals">journals</a>)</li> <li><a href="/wiki/Schools_of_economic_thought" title="Schools of economic thought">Schools</a></li></ul></div></div></div></td></tr><tr><td class="navbox-abovebelow" colspan="2"><div> <li><a href="/wiki/Category:Economics" title="Category:Economics">Category</a></li> <li><a href="/wiki/Index_of_economics_articles" title="Index of economics articles">Index</a></li> <li><a href="/wiki/Category:Economics_lists" title="Category:Economics lists">Lists</a></li> <li><a href="/wiki/Outline_of_economics" title="Outline of economics">Outline</a></li> <li><a href="/wiki/List_of_important_publications_in_economics" title="List of important publications in economics">Publications</a></li> <li><a href="/wiki/Portal:Business" title="Portal:Business">Business portal</a></li> </div></td></tr></tbody></table></div>    </div><noscript><img src="https://login.wikimedia.org/wiki/Special:CentralAutoLogin/start?type=1x1" alt="" width="1" height="1" style="border: none; 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