What is neoclassical synthesis

Neoclassical synthesis is a combination of two theories. One of them, Keynesian, reveals the notion of "effective demand". The second, neoclassical, reflects the meaning of distribution and production. Keynesianism specializes in studying the conditions of implementation, which determine the actual industrial level. The neoclassical direction, according to a number of authors, begins precisely with the factors reflecting the optimal (potentially possible) degree of development of production. When considering the possibility of convergence of these two theories, thus, the first step is considered to be a certain "highlighting of concepts."

Neoclassical synthesis presupposes the unity of the object of investigation of both currents of economic thought. The peculiarity of the unified theories is that the object is a functional quantitative dependence of capitalist reproduction. Neoclassical synthesis, therefore, involves studying the current aspect of the production process from various angles.

The unification of the currents is a certain "spin-off" of the macroeconomic functional area of research from the bourgeois theory of a traditional character. In this area, there was no other way to form a macroanalysis. Thus, neoclassical synthesis of currents is a confirmation of the division of political economy into two main directions: functional and historical concepts. The beginning of the unification process testified to the unsatisfactory nature of the existing aspects, which acted as the theoretical basis for the state-monopoly control of the capitalist system.

"The great neoclassical synthesis" was associated with bourgeois politicians and scientists with the elimination of crisis moments in the economy, which acquire a rather acute character over time. Some authors saw the task of combining theories in a significant reduction in unemployment and inflation, in accelerating the growth rate of the economic system. Another aspect was the desire to overcome the fragmentation of directions and trends of political economy, creating a single concept.

If the neoclassical synthesis turned out to be ineffective, we would have to admit that the mixed system of management has limited capacity to change the growth rates.

It is extremely important to develop capital in depth. It should be said that it does not always happen smoothly in a mixed economy. However, assuming that employment is maintained at a high level in the country, part of the output can be withdrawn from the consumption area and allocated for capital formation. For this, a combination of certain activities is used. First of all, it is necessary to pursue a policy of monetary expansion. It also promotes deeper development. Neutralization of the increase in investment costs is carried out through a fiscal tight policy that provides for increased tax rates.