Abstract

The automatic full-employment equilibrium conclusion of the early Classical economists is the main reason of conflict between Keynes and Keynesian economists and the Classicals. In this article we will firstly focus on the Classical System and the Keynesian System to have a better understanding of the Neo-Classical System. We will then cover the Pigou Effect and the Neo-Classical Synthesis which represents itself as a compromise between the Classical and Keynesian conclusions in terms of reaching the full-employment equilibrium. We’ll them discuss the compatibilities of these systems.