...Keynes’s “GENERAL THEORY” valid only for modern capitalism? The modern capitalism interpretation: ............................................................................................ 2 Some evidence in the modern capitalism interpretation: ................................................................. 2 elements of a general theory of employment and potential instability under capitalism: ................. 3 ð A “monetary economy” and the search for pecuniary gains: ................................................... 3 ð Determination of employment in the short period: ................................................................. 3 ð The rudiments of a theory of expenditure and critique of Say’s law: ....................................... 4 ð A more detailed theory of expenditure: .................................................................................. 4 ð Uncertainty, expectation and confidence: ............................................................................... 4 ð Investment, asset choice and liquidity preference: ................................................................... 4 ð Employment and the essential properties of money: ............................................................... 4 ð Potential instability: ................................................................................................................ 5 ð Investments, saving and banking system:............................................................
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...A Critical Review of Keynes’ General Theory of Employment, Interest & Money By:- Deepika Rana Priyanka Gupta Biographical Account John Maynard Keynes is doubtlessly one of the most important figures in the entire history of economics. He revolutionized economics with his classic book, The General Theory of Employment, Interest and Money (1936), regarded as probably the most influential social science treatise of the 20th Century. The son of the Cambridge economist and logician John Neville Keynes, John Maynard Keynes, born in 1883, was bred in British elite institutions - Eton and then King's College Cambridge. During his freshman year at Cambridge, Keynes was invited to join an intellectual group called "The Apostles" that met periodically to discuss literary, philosophical, political, and aesthetic questions. Through his association with the Apostles, Keynes became introduced to the philosophy of G. E. Moore; critics note the pervasive influence of Moore's Principia Ethica on Keynes's A Treatise on Probability, his only philosophical work, as well as on his economic methodology. His first book on Indian currency (1913) was directly related to his experience at the India office. From 1914 to 1918, J.M.K. was called to the UK Treasury to assist with the financing of the British war economy. He excelled at his job and the influence he gained earned him a position with the British delegation to the Versailles Peace Conference in 1918. J.M.K was appalled at the vindictive...
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...“The underlying assumption in collaborative theory is that each individual within the group has an equal opportunity to negotiate a position, but while there is an appearance of equity, the truth is, as David Smit notes, collaborative methods can in fact be construed as authoritarian and do not reflect conditions outside the parameters of the controlled environment of the classroom.” (Greenbaum, 2002, SUNY Press) A common concern, when writing a collaborative paper, is whether each individual’s opinion is represented. The task of voicing each person’s point of view is difficult, if not impossible. The likely hood of finding a group of random individuals that have the same views on a particular topic is slim to none. That is the beauty of our culture. Each person has been brought up differently with their own morals, values and personal experiences that have caused them to believe the way they do. So, how do you ensure each of your opinions is represented? Some tools that would be useful to a group tasked to complete a paper together are: Communicating within your learning team, meeting and completing a rough outline together, and lastly, coming to an agreed upon stance as to the point of view of the paper. Communication is the key to a successful team interaction. It is imperative that the learning team maintains an open dialogue with each other from the beginning. Sitting down and discussing each teammate’s point of view on the subject, will make it easier to decide how to...
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...John Maynard Keynes He was a famous economist born on 5th June 1883. His father was an economics professor at Cambridge. son of a Cambridge economics professor If ever there was a rock star of economics, it would be John Maynard Keynes. Keynes shares his birthday, June 5th, with Adam Smith and he was born in 1883, the year communist founder Karl Marx died. With these auspicious signs, Keynes seemed to be destined to become a powerful free market force when the world was facing a serious choice between communism or capitalism. Instead, he offered a third way, which turned the world of economics upside down. In this article, we'll examine Keynes' doctrine and its impact. (To read about Adam Smith, be sure to check out Adam Smith: The Father Of Economics.) Keynes was ultimately a successful investor, building up a private fortune. His assets were nearly wiped out following the Stock Market Crash of 1929, which he failed to foresee, but he soon recouped. At Keynes's death, in 1946, his worth stood just short of £500,000 – equivalent to about £11 million ($16.5 million) in 2009. His first prediction was a critique of the reparation payments that were levied against the defeated Germany after WWI. Keynes rightly pointed out that having to pay out the cost of the entire war would force Germany into hyperinflation and have negative consequences all over Europe. He followed this up by predicting that a return to the prewar fixed exchange rate sought by the chancellor of the exchequer...
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...Running head: JOHN MAYNARD KEYNES 1 The Most Influential Economist of the 20th Century Lucas Strader Post University JOHN MAYNARD KEYNES 2 The Most Influential Economist of the 20th Century In the history of economics, John Maynard Keynes is of the most influential people. He strongly influenced the economy and became widely recognized while he was still alive. The man who 75 years ago wrote an essay “The Economic Possibilities for our Grand Children” brought very important issues to our attention. Keynes wondered what kind of world our children would live in, and what sort of tools would they need to succeed and be happy. So what do we know about this extraordinary man, and how did his economic views change our lives? In order to know why Keynes was a successful economist, it is important to know where he came from. John Maynard Keynes was born June 5, 1883 in Cambridge England. His father was an economist and a lecturer at the University of Cambridge, and his mother was a local social reformer. With the assistance and coaching of his parents, Keynes was successful throughout his time in school. Many people were not surprised that Keynes became an economist since his father was a professor of economics. He was good at managing his own finances. His investments with foreign money made him a wealthy man. This allowed him to sponsor the classic ballet along with his Russian...
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...What is the role of the reserve army of labor Marx? How would you gauge Marx's approach in relation to the theories of effective demand developed by Kalecki and Keynes? Throughout economic theory, there are various responses to the creation and subsequent role of unemployment and the wage rate. In Karl Marx’s theory, unemployment, or the ‘reserve army of labour’, is necessary for capitalism to regenerate itself, and is also what determines the wage rate. For John Maynard Keynes and Michael Kalecki, unemployment is caused by the failure of effective demand. This essay will first demonstrate Marx’s approach to employment through the study of the reserve army of labour and the cyclical tendencies of the capitalist system, and then Keynes and Kalecki’s theories of effective demand which led to the proposition that the economy ‘will not settle at full employment equilibrium; by and large it will not even reach it except by chance’ (Halevi, 2007, week 7, p. 8). For Marx, unemployment, or the reserve army of labour, is a ‘necessary requirement for capital accumulation’ (Halevi, 2007, week 4, p. 2), linked to fluctuations in the wage rate and thus the rate of profit. The existence of a large reserve army of labour keeps wages down, because there are many unemployed workers available and willing to work for little money. Like the classical economists, Marx contends that low wages mean capitalists reduce their costs of production, resulting in a higher rate of profit and...
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...Both Karl Marx and John Maynard Keynes greatly influenced the world with their respective economic theories. Born in 1818 in Germany, Marx grew up as the second son of a liberal, middle-class Jewish family. Throughout his life, Marx suffered poverty, and possibly because of his upbringing in life, he creates a disdain for capitalistic views. His most notable books Communist Manifesto and Das Kapital illustrated his well-known theories. Marx died in 1883, and in that same year, the birth of Keynes passed. Born in England, Keynes grew up in a comfortable English social class. Throughout his life, Keynes enjoyed success and great accomplishment. His books Economic Consequences of the Peace and The General Theory made his ideas and thoughts on economics and his view on protecting capitalism notorious. Marx and Keynes, two very different economists with distinctive proposals, share some similarities, but overall, the two possess totally different concepts on capitalism. Marx and Keynes differ in their broader economic views, but they still agree on some levels. Both economists attempt to devise an economic theory that will explain the problems of the real capitalist world in which they lived in during their respective times. Both predict an unstable capitalist system, since they both believe that a perfect capitalistic system rises and falls periodically. Marx supposes that by raising the national product over the long run will cause an ultimate collapse of the system and allow it...
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...utility with an underlying theory of rational choice theory. In the post war period a movement occurred that sought to synthesis the macroeconomic, long run theories of John Maynard Keynes with the microeconomic, short-run theories of neoclassical economics. This essay will explore how John Hick’s ISLM synthesis of Keynes is related to the neoclassical growth model. In addition it will explore how both the growth model and theory of capital reproduce problems inherent in the explanation of multi-sector economies. The Keynesian revolution, one of the “most significant events in twentieth century economic science,” disputed society’s adherence to classical laissez-faire economics (Yaroufakis, Halevi, & Theocarakis, 2011). The unsubstantiated ability of the self-clearing markets to maintain equilibrium was challenged during the early twentieth century by John Maynard Keynes in his text The General Theory. Yet as the depression strengthened and the global economic climate changed, a group of economists emerged that ceased to be either anti- or pro-Keynesian. Known as the Neo-Keynesians, they incorporated the macroeconomic framework of Keynes’ theory for understanding short run aggregate issues while the neoclassical model remained relevant for long term microeconomic analysis of growth. With the creation of economic tools, namely the ISLM Model that led to the development of the Neoclassical Synthesis, the economists who interpreted and adapted Keynesian theory became the most influential...
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...economics is a school of economic thought with its origins in The General Theory of John Maynard Keynes, although its subsequent development was influenced to a large degree by Michał Kalecki, Joan Robinson, Nicholas Kaldor and Paul Davidson. Keynes' biographer Lord Skidelsky writes that the post-Keynesian school has remained closest to the spirit of Keynes' work, particularly in his monetary theory and in rejecting the neutrality of money. Introduction Post-Keynesian economists maintain that Keynes' theory was seriously misrepresented by the two other principle Keynesian schools: neo-Keynesian economics which was orthodox in the 1950s and 60s - and by New Keynesian economics, which together with various strands of neoclassical economics has been dominant in mainstream macroeconomics since the 1980s. Post-Keynesian economics can be seen as an attempt to rebuild economic theory in the light of Keynes's ideas and insights. However even in the early years in the late 1940s post-Keynesians such as Joan Robinson sought to distance themselves from Keynes himself, as well as from the then emergent neo-Keynesianism. Some post-Keynesians took an even more progressive view than Keynes with greater emphases on worker friendly policies and re-distribution. Robinson, Paul Davidson and Hyman Minsky were notable for emphasising the effects on the economy of the practical differences between different types of investments in contrast to Keynes more abstract treatment. A feature of post-Keynesian economics...
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...While researching, I ran across a small article titled A Review Of Keynesian Theory. This particular article is an overall review of Keynes theories of economics as well as arguments against his philosophy. The website intertwines the Great Depression with its causes and solutions which include controversies on which solutions were successful or failures. I’ve chosen the section in our text covering the Great Depression and the Keynesian Revolution found in Chapter 33 because it correlates with my career as a high school Social Studies teacher. Usually with constraints of time and curriculum to cover, I can teach significant events in history but there are topics that I would love to divulge a little more time and understanding to not only to teach of course, but also for my own learning. Keynesian economics is one of those topics. I discuss with my classes the basics of Keynes theories and how they were applied as well as points of success, but it is difficult to go much further than that. To summarize what I learned between our text and A Review of Keynesian Theory, Keynesian economics worked at the macroeconomic level. The theories stated that the trends at the macro-level could overpower individuals and their actions at the micro-level. It emphasized the significance of the aggregate demand for goods in driving the economy, especially economies in a slump. It was based on this that Keynes advocated the idea of government intervention through policies that could fight...
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...Hannah Grace S. Bielza AC-301 The Keynesian Theory * In the depression of the 1930s democratic nations were concerned about the problem of inflation. Wherein, general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling. * Because of inflation, workers are unwilling to accept further cuts in their wages for the reason that their earnings were already cut down by unemployment and part-time work. It is really hard to work, earning a small amount of money while having a huge amount of expenses that’s why a lot of workers don’t want to cut their wages. * Explanation of wages and wage changes in this kind of setting inevitably directed attention to general wage levels rather than to wage rates in the labor markets. This means that the employers focus on this average wage paid to employees rather than the rate per hour or based on production. * John Maynard Keynes advanced his full employment theory by publishing “General Theory of Employment, Interest, and Money” in 1936 which provides basic analysis on which the theory is based. * To many theorists in the classical tradition, Adam Smith’s, “Wealth of the Nations” provided rationalization for policies they thought necessary but could not embrace with clear conscience. There’s no scholarly document to prove that this will fit more closely to the needs of the times. Keyne’s Theory on Employment * Keynes admitted that the Classical and Neo classical...
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...JOHN MAYNARD KEYNES Intellectual Biography: John Maynard Keynes Shawn Detamore Davenport University Abstract Known as one of the most influential economist of the 20th century, John Maynard Keynes changed the economy by his Keynesian Economics. Not only was it used during the Great Depression, it is continually used in our economy today. Introduction John Maynard Keynes (also known as “1st Baron Keynes) was a British economist that was born in Cambridge, England. His ideas and theories changed the practice of modern macroeconomics. He is well known for the Keynesian economics that made him one of the most influential economist of the 20th century (Keynes, 2014). Since he was so influential, there were many other economist that were influenced by John Maynard Keynes that supported the Keynesian theory. A few of those economists where: James K. Galbraith, James Tobin, Paul Samuelson and Paul Krugman. Keynes also wrote many books related to economics, one well-known one was the General Theory of Employment, Interest, and Money. He also wrote A Treatise on Money, The Economic Consequences of Mr. Churchill, and A Tract on Monetary Reform. Keynes was very influential. In 1999, Time Magazine listed John Maynard Keynes as one of the 100 most important and influential people of the 20th century (Time Magazine, 2014). The Economist also named Keynes as Britain’s most famous 20th-century economist. Keynesian Economics Keynesian Economics is the theory of total spending...
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...Assignment on “Relevance of Keynesian Theory to underdeveloped Economies” Submitted to : Dr. A.K Monaw-war Uddin Ahmed Course instractor Macroeconomics MBA-510 Submitted By: Chowdhury Omar Hasan Munna ID-1130657 Date of submission: 22nd November,2011 Independent University ,Bangladesh Keynesian theory and underdeveloped countries: Lord John Maynard Keynes wrote the General Theory of Employment, Interest and Money as a solution to the problem of periodic unemployment faced by developed industrial nations of the West during the great depression of the thirties. Keynesian theory singles out deficiency of effective demand as the major cause of unemployment and low level of income in industrial economy operations under a laissez faire system. Deficiency of effective demand is a prominent feature of economies undergoing depression and in order to improve the level of effective demand in an economy. Keynes suggested policy measures like cheap money policy, government’s compensatory investment spending, deficit financing and other fiscal methods. In essence, therefore, Keynesian economics turn out to be economics of depression applicable to developed countries. Its applicability in underdeveloped countries is very limited. To quote Joan Robinson: “ Keynes’s theory has little to say directly, to the underdeveloped countries, for it was framed entirely in the context of an advanced industrial economy, with highly developed financial institutions and a sophisticated business...
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...| The Abuse of Keynes’ Theory of Government Spending | And Why Government Spending Needs to Stop | | Chase Cooper | 12/13/2012 | Political Economy Dr.Ramos Abstract: The goal of my research paper is to analyze and present how John Maynard Keynes’ theory on government spending is being abused by the American government insofar that the American government is not following the guidelines and foundations that premised Keynes’ theory, and instead are picking the parts of the theory that allow them to spend at unsustainable levels, creating problems that, one way or another, eventually have to be resolved. My research will prove how the American government is conducting fiscal policy in a way that abuses Keynes’ theory on government spending, and, as a result, why Keynes would not support the American government in their spending endeavors, despite using his theory as their justification. I will be critiquing the application of Keynes’ theory from the Austrian, specifically the works of Friedrich A. Hayek, and Monetarist perspectives, supported by arguments given by Milton Friedman. Section 1: Keynes’ Theory on Government Spending John Maynard Keynes published his famous work, The General Theory of Employment, Interest, and Money, in 1936, during the Great Depression. Economies all over the world were suffering severely from the Great Depression, and there was little hope of economic recovery in the near future. Keynes agreed with the classical economist’s notion...
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...actual disposable income tend to be higher than estimated based on quarter observation. This is evidence against Keynes’s theory of consumption and in favor of Friedman’s permanent income hypothesis.” Explain and discuss. Introduction Consumption expenditure accounts for the largest proportion of the Gross Domestic Product in most countries. Referring to Miller (1996), consumption is the total of goods and services that people in the economy wish to purchase for the purpose of immediate consumption. More importantly, consumption is one of the main determinants of an economy’s aggregate demand and economists can therefore estimated the aggregate demand as well as evaluate the effects of fiscal policy based on the determinates of consumption. This essay will commence by explaining the Keynesian consumption function and the consumption puzzle. It will then discuss the Friedman’s permanent income hypothesis before explaining the difference of marginal propensity to consume between cross-section data and long-term time series data. Finally, it will conclude that permanent income hypothesis by Milton Friedman provides a more complete model for people to research consumption and aggregate demand. The Basic Keynesian Function Over the past few decades, there are lots of works have done to research consumption. The most famous study is J M Keynes’s General Theory published during America’s great depression. Keynesian consumption function associate changes in consumption with current...
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