April 22, 2003
The Classical Model
The Classical Model of Income and Employment was the leading view of business cycles before the Great Depression.
Equilibrium in the supply and demand for labor is the fundamental determinant of the level of output in this supply driven view of the economy.
Business cycles are due to shifts in the production function, caused perhaps by technology shocks.
For more information see www.econmodel.com/classic.
Posted by bparke at April 22, 2003 02:05 PM