• Research Paper on:
    Recessions and Keynesian Economics

    Number of Pages: 5

     

    Summary of the research paper:

    In five pages this paper examines how classical economic theories are contradicted by Keynesian economics in a consideration of how Keynes argued that recessions were worsened by the laissez faire classical school of thought. Four sources are cited in the bibliography.

    Name of Research Paper File: MM12_PGkeynes.rtf

    Buy This Research Paper »

     

    Unformatted Sample Text from the Research Paper:
    intervention will only prolong the recession or make it worse. Classical economic theory had held that a free-market economy would inherently self-regulate and self-correct itself always going towards full employment  equilibrium that would then result in the greatest among of benefit for everyone. As for government, the best thing any government could do was to get out of the way  and let the economy do as it (Institute for Economic Analysis, 1999). That was the way of the free market and this allowed individual enterprise to thrive (Institute for Economic  Analysis, 1999). Then, along came Keynes who said the assumptions underlying this theory and practice were all false (Institute for Economic Analysis, 1999). What governments should do is to look  at the countrys economy as a huge business enterprise that needs to be managed well and the basic tool of management in individual business enterprises was the accounting system (Institute  for Economic Analysis, 1999). It is the accounting system that will help the business prosper (Institute for Economic Analysis, 1999). It was in 1936 that John Maynard Keynes presented to  the world a new theory of economics in his book, The General Theory of Employment, Interest, and Money (European Schoolnet, 2001). In this book, Keynes discussed the causes of unemployment  and his theories regarding what governments should and should not do in hard economic times (European Schoolnet, 2001). Keynes argued that governments should not follow the Classical traditions of economists  like Adam Smith; these theories held that in a recession, wages and prices, loans and investments would all decline until full employment was once again restored (European Schoolnet, 2001). The  Classical tradition held that in a recession, the government should not intervene because left to itself, market conditions would change and the economy would correct itself (European Schoolnet, 2001). Keynes 

    Back to Research Paper Results