Readers Questions Could you please explain the comparison between the Keynesianism & monetarism? Keynesianism emphasises the role that fiscal policy can play in stabilising the economy. In particular Keynesian theory suggests that higher government spending in a recession can help enable a quicker economic recovery. Keynesians say it is a mistake to wait for markets …
New Keynesianism refers to a branch of Keynesian economics which places greater stress on microeconomic foundations to explain macro-economic disequilibrium. A key element of new Keynesianism is the role of wage rigidities and price rigidities to explain the persistence of unemployment and macro economic disequilibrium. New Keynesianism combines elements of traditional Keynesianism (sometimes referred to …
Recently, I was researching a post on US v EU unemployment. No.1 on Google (a news result) was a post with some observations on EU vs US economic policy. This paragraph caught my attention …But many European countries have completely mismanaged their budgets for continued government stimulus, which lends to the argument of free market …
Keynes was one of the great economists of the twentieth century. Even his critics would have to admit he had a certain turn of phrase and wit. These are some of his more memorable quotes The long run is a misleading guide to current affairs. In the long run we are all dead. Economists set …
Readers Question: I have a hunch that Keynesian responses to recession work best in industrial countries such as China and 1930’s USA as opposed to post industrial societies such as the US and UK. In the great depression consumption and production were, generally, in the same countries, e.g. cars produced in America would be consumed …
Readers Question: What did Keynes mean by ‘In the Long Run we are all dead’ – From ‘In the Long Run we are all dead’ For Keynes, the short run was important and due to the instability of the macro economy, government intervention may be necessary to kickstart the economy. Classical economists tend to be …
Readers Question: Explain why Keynesians would argue that demand management policies are the most effective way of increasing the equilibrium level of output. Keynesian fiscal stimulus is a decision by the government to increase government spending financed by government borrowing. Keynes advocated fiscal stimulus when the economy was stuck in a recession. In this situation, …
In the past four years, the German economy has experienced a torrid time. Whilst America has boomed, Germany has experienced the worst recession in decades, with the shock return of high inflation and falling real wages. How Germany Damaged its Own EconomyWatch this video on YouTube In the 2012 Euro debt crisis, it was southern …