What are the two paradigms of industrial economics?

There are two mainstream economic paradigms in modern economics: one is "neoclassical" economic method, and the other is "neo-Keynesian" paradigm. The basic assumptions used in the study of these two economic paradigms are sometimes contradictory, and the opposite results may be obtained from the basic assumptions. They often criticize each other, but they are very convincing in their respective fields.

The enterprise theory and equilibrium theory listed in economics textbooks are not equivalent to the "neoclassical" paradigm, and these are all conclusions drawn by applying the "neoclassical" paradigm.

The essence of "neoclassical" paradigm has two points: ① It is a methodology. Generally speaking, it takes general assumptions as the starting point, uses strict deductive reasoning, and finally draws intuitive inferences; (2) It inherits the theory core of classical economics-Say's Law (in a perfectly competitive market, the competitive force will make the market imbalance return to equilibrium through the role of price).

The paradigm of "new Keynesianism" tends to emphasize the defects of the market itself (such as information asymmetry). ), and take this as a starting point to build a theoretical system. It emphasizes the role of demand more than the "neoclassical" paradigm, and thinks that the change of total demand will directly affect the change of macro-economy. (For example, in monetary policy, a substantial increase in interest rates will increase financing costs and reduce people's financing needs, thus inhibiting investment and affecting economic growth. )