The main difference between new classical and new Keynesian theory is with respect to the assumption of

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The main difference between new classical and new Keynesian theory is the assumption about how flexible wages and prices are. New classical theory assumes that wages and prices are perfectly flexible, while new Keynesian theory acknowledges that there may be some stickiness in wages and prices. Both theories emphasize the importance of expectations, but the difference lies in the assumption about the degree of price and wage flexibility. The slope of the SRAS curve and the AD curve are important concepts in macroeconomics, but they are not the main point of difference between new classical and new Keynesian theory.

The Main Difference Between New Classical and New Keynesian Theory