Posted by:brook delorme

3 replies on “i fail to understand keynesian economics

  1. Brooky, John Maynard Keynes’s seminal work is ‘The General Theory of Employment, Interest & Money’ and the essential idea is that modern economies can suffer from a persistent lack of demand, consigning millions to what he argued is unnecessary unemployment and misery. Although capitalist economies contain forces to restore full employment, these are weak and in some circumstances can take far too long to work. It is therefore better for governments to stimulate economies suffering from a lack of demand by stepping in with cheap money and deficit-financed tax cuts or public expenditure increases. Put another way, in times like these we will have big government interference….This macroeconomic polocy is now in vogue (not the fashion mag but the trend)……
    I love his statement, “in the longrun we are all dead.” Simply understand this & you get it….You will never fully understand him as he was a huge meat eater…

  2. hmmmm…
    here’s what I don’t understand: how does this not lead to serious inflation?

    also, my understanding was that a certain amount of unemployment was necessary to make an economy work (we need a flexible labor pool.) so full employment is not a very good goal, in that POV.

  3. Brooke, go to New York Times site and read Paul Krugman’s columns. Krugman is a brilliant and wonderfully clear economist and writer who just got the Nobel. Then read stuff he suggests in his columns.

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