Notice: This is the official website of the All Empires History Community (Reg. 10 Feb 2002)

  FAQ FAQ  Forum Search   Register Register  Login Login

John Maynard Keynes

 Post Reply Post Reply
Author
Kapikulu View Drop Down
Arch Duke
Arch Duke
Avatar
Retired AE Moderator

Joined: 07-Aug-2004
Location: Berlin
Online Status: Offline
Posts: 1914
  Quote Kapikulu Quote  Post ReplyReply Direct Link To This Post Topic: John Maynard Keynes
    Posted: 14-Apr-2007 at 14:32

It is claimed that Keynes' theories on economics had been refuted by various others. To which extent is that true?

P.S. : I don't know much about those counter-theses
We gave up your happiness
Your hope would be enough;
we couldn't find neither;
we made up sorrows for ourselves;
we couldn't be consoled;

A Strange Orhan Veli
Back to Top
Antioxos View Drop Down
Consul
Consul
Avatar

Joined: 26-Apr-2006
Location: Hellas
Online Status: Offline
Posts: 340
  Quote Antioxos Quote  Post ReplyReply Direct Link To This Post Posted: 14-Apr-2007 at 17:25
Keynesian Theory, is an economic theory  based on the ideas of 20th century British economist  Jhon Maynard Keynes . Keynesian  economics promotes a  mixed economy , where both the state  and the private  sector  play an important role. Keynes asserted the importance of aggregate demand  for  goods  as the driving factor of the economy , especially in periods of downturn. From this he argued that government policies could be used to promote demand at a macro level, to fight high unemployment  and  deflation  of the sort seen during the 1930s.
Basiccaly Keynesianism promotes full employment as the main goal of government.
Monetarism (Milton Friedman,Chicago school ) focuses on the supply and demand for money as the primary means by which economic activity is regulated. Monetary theory focuses on  money supply and on inflation as an effect of the supply of money being larger than the demand for money.Monetarism had an ideological as well as a practical appeal: monetary policy does not, at least on the surface, imply as much government intervention in the economy as other measures.Τhe main goal of  Friedmanism  is to maintain stable monetary value.
Both theories are right when you prove them with econometrics models in a lab but in reality there is no doctrines.

By antioxos at 2007-08-20
Back to Top
Zagros View Drop Down
Emperor
Emperor

Suspended

Joined: 11-Aug-2004
Online Status: Offline
Posts: 8792
  Quote Zagros Quote  Post ReplyReply Direct Link To This Post Posted: 14-Apr-2007 at 18:27

Interesting, a little of topic but I wonder if anyone can contrast Friedmen's thesis with Smith's free market theory. 

Back to Top
Cywr View Drop Down
King
King
Avatar
Retired AE Moderator

Joined: 03-Aug-2004
Online Status: Offline
Posts: 6003
  Quote Cywr Quote  Post ReplyReply Direct Link To This Post Posted: 15-Apr-2007 at 08:08
It hasn't so much been refuted, as replaced by the next generation of economists, the worshipers of supply-side economics.
Ultimatly, economic theory is largely about ideology and dogma.
Arrrgh!!"
Back to Top
hugoestr View Drop Down
Tsar
Tsar

Suspended

Joined: 13-Aug-2004
Online Status: Offline
Posts: 3987
  Quote hugoestr Quote  Post ReplyReply Direct Link To This Post Posted: 17-Apr-2007 at 12:32
What I have read is that the crisis in the 1970s made Keynes unpopular. Friedman's school of thought offered some solutions against inflation that have been moderately successful. The main problem with the Chicago thought is that many of their policies ended up created massive income gaps between the poor and the rich.

Back to Top
Cezar View Drop Down
Chieftain
Chieftain
Avatar

Joined: 09-Nov-2005
Location: Romania
Online Status: Offline
Posts: 1211
  Quote Cezar Quote  Post ReplyReply Direct Link To This Post Posted: 28-Apr-2007 at 07:10
If one looks at the evolution of the economic sciences he will realize that all of them "work" only for a brief period of time. It's not matematics, economy (and society) is constantly changing so what was is not what is and will be.
You can use both Marks and Keynes and get to a solution that would generate a new theory. So, noone is irrefutable yet noone is ultimately right.
Back to Top
opuslola View Drop Down
Tsar
Tsar
Avatar
suspended

Joined: 23-Sep-2009
Location: Long Beach, MS,
Online Status: Offline
Posts: 4620
  Quote opuslola Quote  Post ReplyReply Direct Link To This Post Posted: 11-May-2010 at 14:56
Originally posted by hugoestr

What I have read is that the crisis in the 1970s made Keynes unpopular. Friedman's school of thought offered some solutions against inflation that have been moderately successful. The main problem with the Chicago thought is that many of their policies ended up created massive income gaps between the poor and the rich.



I am afraid I do not agree with the above statement! The real cause of "massive income gaps" is the per-cent raise! That is, at some point in time, someone came up with the idea to give all employees a raise, not of the same amount of spendable income, but a raised based upon their current wage! As anyone who can understand "compound-interest", this type of wage, is highly biased towards those making highest wage!

Thus, assuming a yearly wage for the lowest paid government employee (I use gov. employee, because they were the first to use this method of giving raises on a large scale, other than Unions) made $4,000 per year in say 1969, and they were given a 5% raise,then their new yearly pay would be $4,200, but suppose the top rate/grade for this same government employee, (as a top manager) was $7,000 PA, then the same percentage raise would be in the amt. of $350.00 and the new rate of pay would be $7,350 PA! In other words, in purchasing power the higher grade employee would receive an additional $150.00 per year, to spend!

Now all one has to do is to use this same 5% raise, and let it run for 40 or so years! I'm sure someone has the mathematical mind to do this exercise!

Do, it and see what come out? Then see if you can see how such raises, over a long period of time make the "rich" richer! And by far!

Note, that when we started the above comparison the gap between the lowest employee and the highest paid employee was $3,000.00!(I.e. $3,000 and $7,000!) What will it (the earnings gap) be, assuming an average raise of 5% for 40 years?

I'll bet you would be surprised?

Regards,

Edited by opuslola - 11-May-2010 at 15:00
http://www.quotationspage.com/subjects/history/
Back to Top
C. Isaurikon View Drop Down
Janissary
Janissary
Avatar

Joined: 28-Apr-2010
Online Status: Offline
Posts: 28
  Quote C. Isaurikon Quote  Post ReplyReply Direct Link To This Post Posted: 11-May-2010 at 17:09
Keynes was a brilliant economist and offered some of the best solution to the economic problems of the mid 20th century. His ideas of government spending on public works helped keep people employed and society stable while making use of the cheap supply of human labour.

He played a defining role in cementing the stability of prosperity of the post WWII era through his input into the ideas that shaped the Bretton Woods deal. Britain can certainly be proud of this economic genius.
Back to Top
 Post Reply Post Reply

Forum Jump Forum Permissions View Drop Down

Bulletin Board Software by Web Wiz Forums® version 9.56a [Free Express Edition]
Copyright ©2001-2009 Web Wiz

This page was generated in 0.078 seconds.