We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

Economics : John Keynes Contribution - Essay Example

Comments (0)
Economics Name Institution Economics Part 1 Without a doubt, John Keynes contribution to economics among other economists is acknowledged through his general theory on employment, interest and money. More significantly, Keynes focused on the significance of government intervention in the control of the Laissez-faire economy that could control the effects of inflation and unemployment in the economy…
Download full paper
Economics Essay: John Keynes Contribution
Read TextPreview

Extract of sample
Economics : John Keynes Contribution

Download file to see previous pages... In addition, Keynes cautioned against free market systems as he pointed it out to be the cause of unexpected rampant increase in unemployment rates. As Keynes differed with the classical perspective of economists on employment he keenly explained that employees were interested on the nominal wage rather than real wage. Keynes further describes how employees respond to the levels of unemployment based on prices of wages in terms of frictional, seasonal and voluntary unemployment. Keynes biggest contribution is based on the money illusion by workers that lead to involuntary unemployment. In addition, Keynes came up with the liquidity preference theory of interest rates that focuses on uses of money in differences classes. This is because money could be held for transaction motive as individual wish to make normal purchases besides money for precautionary motive that is for unforeseen incidences and money for speculative motive of investments to get returns. In addition, the government can control the amount of money borrowed from financial institutions by increasing the interest rate during periods of high inflation. Both the New Keynesian economists and New Classical economists have made contributions to the field of economics in the twentieth century. As a group opposed to the Keynes theory perspective, the new classical group of differs as they point out that Keynes did underestimate the impact of the quantity of money on aggregate demand and prices in the economy. In addition, the new classical economists argue a different notion on unemployment and inflation (Meltzer, 2005). This is because they advocate for a stable inflation-unemployment trade-off through the Phillips curve that involves the assumption of changes in the price level in the private sector freely. In addition, this class of economists conceptualized that the expectations-augmented in the Phillips curve could reduce the unemployment rate to a further extent below its natural level leading to higher levels inflation in the long run (Meltzer, 2005). The new classical economists differ with the Keynes economists as they believe both monetary and fiscal policy lead to increased inflation rates because the response of suppliers to economic market. Based on classical assumption on flexible prices a consecutive increase in aggregate demand automatically leads to higher prices; that cause unexpected shift as suppliers will increase production to take advantage of increased relative prices. The New Keynesian economists are based on the theory contributions made by Keynes as they believe that in the economy the nominal variables can affect real variables and understanding of market imperfections in the economy. This new group of Keynes economists believes that imperfect competition will solve several problems that deal with wages and prices levels thus, reducing the possibility of involuntary unemployment (Meltzer, 2005). This new class of Keynes economists believes that the welfare of the citizen is in increasing output and employment. Therefore, this class of economists believes that both monetary and fiscal policy allows for changes in price levels as it affects both the demand and supply. Part 2 Population is 500,000 Production local = 100,000 cars per year People who purchase cars = 90,000 Imports = 50,000 Government spending = 25,000 for police force and 10,000 for companies giving a total of ...Download file to see next pagesRead More
Comments (0)
Click to create a comment or rate a document
Economics Essay
The total number of unemployed people had increased to 2.53 million, highest since 1994. The number of people applying for an unemployment allowance was at a staggering as 1.45 million. On the other hand in 2010 the UK government’s borrowing was at 148.9 billion pounds.
5 Pages(1250 words)Essay
To what extent was John Maynard Keynes' principal contribution to political economy a re-conceptualisation of optimal relation
This is always an inducement to the mind to go deep in search of more plausible and more believable source of information on which academia can rely on. In most cases and very often, obvious anomalies are merely discarded as miscalculations, leaving the initial elucidation unaffected.
20 Pages(5000 words)Essay
John Maynard Keynes
In the income-expenditure framework, real GDP’s equilibrium level is real GDP’s level that is in agreement with the existing aggregate expenditure level (Tucker 2008). *picture taken from Tucker (2008, p. 224) The above diagram is the income-expenditure model of real GDP’s equilibrium formulated by Keynes.
2 Pages(500 words)Essay
John Maynard Keynes contribution to macro economics
Keynesian general theory of macroeconomics states that in the short run, economic output is strongly influenced by aggregate demand. Keynes also said that the total economy expenditure is not a reflection of its productivity. Keynes states that in order for aggregate supply to meet aggregate demand, the goods supplied should be those that are in demand.
8 Pages(2000 words)Term Paper
The Legacy of Keynes
We would examine several issues with regard to Keynes contributions to Economics. The main questions we would look at include the meaning of the term 'theoretical schizophrenia' in post war economics and its relation to Keynes' original contribution. We also examine the extent to which post-war boom can be attributed to Keynesianism.
11 Pages(2750 words)Essay
John Maynard Keynes
A key player in the 20th century economic history of North America is John Maynard Keynes. John Maynard Keynes (1883-1946) was a British economist who is renowned in the present and is considered to be one of the most important players in economic a political theory of his time (Skidelsky 10).
11 Pages(2750 words)Essay
Economic Theories
This rejection has been the result of the critiques directed towards it, mainly by Thomas Malthus, Karl Marx, and most significantly, John Maynard Keynes. Thomas Malthus was the first to challenge Say's Law in 1820. After him Karl Marx criticized it virulently.
9 Pages(2250 words)Essay
Adam Smith & John Maynard Keynes
What is more, John Maynard Keynes and Adam Smith offered more than economic theory; they proposed policy solutions to the existing economic problems. These solutions were developed in order to improve macroeconomic performance and national prosperity. As Wesley Mitchell put
8 Pages(2000 words)Essay
The following quote from Knut Wicksell succinctly expresses this condition, “…there is no single doctrine taken to be a scientific truth without the diametrically opposite view being similarly upheld by authors of high repute … in other fields of
13 Pages(3250 words)Essay
Write about an economic person ,John Maynard Keynes
From Eton he went on to join the King’s College which is also in his birthplace, Cambridge. As an undergraduate from this college, his brilliance was quite notable. At Cambridge he studied mathematics. However, he put studies aside
3 Pages(750 words)Essay
Let us find you another Essay on topic Economics Essay: John Keynes Contribution for FREE!
Contact us:
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us