Contact Us
Sign In / Sign Up for FREE
Go to advanced search...

Keynesian Economic Policies before and after 1970 - Coursework Example

Comments (0) Cite this document
Instructor Date Keynesian Economics, the Golden Age of Capitalism and the Monetary Policy Introduction The differences between Keynesian economic policies and the monetary policies have been the center f a huge debate in Macro economics for so many years since the inception of these two schools of thought (Lipsey and Chrystal, 2007)…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER94.4% of users find it useful
Keynesian Economic Policies before and after 1970
Read TextPreview

Extract of sample "Keynesian Economic Policies before and after 1970"

Download file to see previous pages Friedman suggested that governments have a central bank monetary policy whose main aim would be to sustain the equilibrium of demand and supply of money in the economy. As opposed to the Keynesian economics which mainly focused on value stability of a country’s currency and the panic resulting from insufficient supply of money that led to alternate currency and collapse, Friedman and his monetary policy focused on stability of prices as a result of the equilibrium between money supply and the demand of money (Lipsey and Chrystal, 2007). The Keynesian economic principles dominated the macroeconomic world in the 19th century in to the early 20th century, in a period characterized by the rise of capitalism. This period is referred to as the Golden Age of capitalism. The golden age of capitalism, led by The US and other Western economic powers especially after the World War II, (from 1945 to mid 1970s) saw the rise of capitalist nations in to major economic regions of the world. Keynesian Economic Policies A prevailing economic principle in the 1930s and during the Great economic depression was that the economy would recover by itself without any interventions from the government. A British Economist, Keynesian, then suggested that governments should increase their spending and cut taxes so as to revive their economies during the depression (Eatwell and Millgate, 2011). Without government intervention, he argued that the economy would be greatly affected by high unemployment rates and would never recover. In his opinion, increasing government spending during an economic downturn would help to boost demand, as well as setting off the chain of the chain of demand by suppliers and workers whose incomes would have been affected by the increased expenditure by the government. Reducing the tax burden would also enable people to have more disposable income, which would help to boost demand in the economy. He also contended that the most appropriate fiscal policy in periods of high unemployment is to run a deficit budget (Eatwell and Millgate, 2011). Keynesian’s ideas were largely ignored by both the British and the US Governments at the time, until after the World War II (Eatwell and Millgate, 2011). After the war, Keynesians principles of a fiscal policy, government involvement in spending and cutting taxes with the aim of maintaining employment rates became the center of attraction in macroeconomics, both in the debate of national economic policies as well as in research. In the US, the Employment Act (1946) helped the government to start using Keynesian’s economic principles to regulate its economy and improve the employment rate. Application of Keynesian principles saw governments regain economic stability throughout the 1950s and 1960s as they recovered from the economic depression. The Keynesian economic theory was based on the principle of a circular flow of money in the economy (Eatwell and Millgate, 2011). This implies that when one person spends money, kit results in another person earning money. This would then raises the demand of the later, leading him to also spend the money and through buying of goods and services, leading to another person earning the money and so forth. According to Keynes, it is this circular flow of money that enables economies to function well. According to the Keynesian Theory, the aggregate demand created by ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Keynesian Economic Policies before and after 1970 Coursework”, n.d.)
Keynesian Economic Policies before and after 1970 Coursework. Retrieved from
(Keynesian Economic Policies before and After 1970 Coursework)
Keynesian Economic Policies before and After 1970 Coursework.
“Keynesian Economic Policies before and After 1970 Coursework”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Keynesian Economic Policies before and after 1970

Does Terrorism Work as a Means of Changing World Policies

That is the dilemma associated with terrorism--- the double-edged weapon. The old saying that one man's terrorist is another man's freedom fighter, is still in vogue. A man belonging to Al-Qaeda can be a so-called freedom fighter for Bin-Laden but for President George Bush Government, he is simply a terrorist, who spills the blood of the innocents.

The basic and the debatable question here is whether terrorism really works in the present scenario in changing the Governments and their opinions? There appears to be a number of instances across the globe wherein it has been felt that terrorists, except killing innocents and making media headings and stories, have generally failed in their deadly mission in toppling the dem...
7 Pages(1750 words)Report

The Economic Impact of the Emergence of China and India

The main macroeconomic variable that toys in the global economy’s shift are the emergence of India and China as new superpowers. This emergence certainly has a number of implications, but among the most relevant are: disruption of the equilibrium of the global economy which results in rising demand of goods, giving way to worldwide inflation; the attractiveness of outsourcing to these countries due to low cost but high talent workforce of these countries for cheaper operations.
The growing middle class of China and India results in booming demand for the automobile industry. This increase in demand, with the increasing purchasing power of these countries’ people, is not limited to automobiles but more apparent in...
10 Pages(2500 words)Assignment

Law Studies: Disposition after the Death

One of the first things that Abelard needs to do is to make sure his wishes are expressed in his will. He may also want to name a close and trustworthy friend to be the executor of his will such that that individual may interview the children of Abelard at the time of his death in order to make a subjective judgment as to whether the children are in fact followers of the Christian faith or if they are only claiming to be. In the event that the children have deceased, then Abelard’s furniture is to go to a museum that may also be executed by Abelard’s chosen executor. In addition to naming the executor, it is critical that Abelard ensure that communication regarding his exact intentions is in detail, within the will and...
7 Pages(1750 words)Assignment

The Globalization Policies in Different Countries

...International trade International trade Introduction The Globalization, Liberalization and Privatization policies adopted by different countries, opened the doors widely open for international trade. Foreign investment and participation in business is welcomed by many countries. The consumers will get better products at cheap rates because of the competition in the market. For example, as per the economic principle, scarcity of a commodity creates demand in the market and hence the price of that commodity will go up. Because of the foreign participation in domestic market, the customers will never fee any scarcity and hence the prices will come down definitely. But most of the countries are still confused about the extent...
6 Pages(1500 words)Coursework

Emergency Economic Stabilization Act of 2008 and How It Has Impacted the Financial Markets

Though there were objections from various quarters about the huge amounts of tax payer’s money being used in the bailout of huge corporates, the Act has been successful in moving the downturn towards a flat point and now has started slowly moving towards a recovery stage. The various programs under the EESA 2008 have played a significant role in the financial sector, housing mortgage, and banking institutions to save the institutions from complete disaster.

The Emergency Economic Stabilization Act is a huge taxpayer bailout designed to rescue the financial sector. The amount of money to be used is around $700 billion or $2000 per American citizen (Public mark up). Emergency Economic Stabilization Act of 2008 is al...
10 Pages(2500 words)Research Paper

Economic Analysis of India

The country’s economy is fast growing with a stable political system that encourages foreign investment although with certain restrictions. The country generally has good energy, transport and communication systems which make the cost of doing business affordably.

The Republic of India found South of Asia is by far the world’s most populous democracy and ranks seventh largest in terms of geographical area (Brown, 1994). India is also the second most highly populated country in the world. The country has a rich culture with four major religions having originally emerged from it; Sikhism, Buddhism, Hinduism, and Jainism. The Indian Republic consists of seven union territories and 28 states and ranks twelfth la...
8 Pages(2000 words)Case Study

Australias Policies on Language and Multiculturalism

The state government is headed by the Premier (Government in Australia n.d.). Each state has its own electoral and educational system (Government in Australia n.d.). Composing the state are smaller political subdivisions or municipalities and run by the local governments called councils (Government in Australia n.d.).
Multiculturalism is an essential element of Australian society since it provides the framework for social goals that foster solidarity and upholds ideas, capacity and economic growth (Multiculturalism 1996). According to the South Australian Multicultural and Ethnic Affairs Commission Act of 1980, multiculturalism refers to the “policies and practices that recognize and respond to the ethnic diversity of t...
9 Pages(2250 words)Assignment

Bernard Madoff : A Scapegoat of the Economic Crisis

Darwin was condemned and treated with contempt by the Church for proposing the theory of evolution that linked all living matter in the earth, including humans. In the case of Bertrand Russell, he was imprisoned as a conscientious objector, for expressing his opposition to British participation in the First World War. These are typical examples of people being wrongfully punished when they were guilty of no crime or fraud or misdoing. It would be highly improper to associate Bernard Madoff with the aforementioned luminaries, for he was truly guilty of carrying out the biggest financial fraud in modern history. At the same time, it would be simplistic to classify him as a victim of the contemporary judicial system. The truth, in fa...
6 Pages(1500 words)Assignment

International Business: World Economic Forum and Davos 2010

...Introduction Globalization, one of the most hotly debated issues means global capitalism to some while others consider it to be the continuation of modernism with the forces of wealth, progress, democracy and happiness at play (Kellner, 2002). Globalization is considered to be beneficial which promotes economic prosperity, cultural diversity and technological advancement. According to the critical social theory, technology and capital work together to create a new globalized and interconnected world. While each force of globalization is important, technological revolution has impacted the business models, value creation and differentiation (Spelman, 2010). The cloud computing technologies that have made the popular social networking...
7 Pages(1750 words)Coursework

Globalization and World Economic Forum at Davos 2010

... increase in the income of women which is expected to be $5.1 trillion by 2013. By earning more and influencing purchase decisions, women have acquired greater power in the market place. There is a greater emphasis on building vibrant business ecosystems that harness a shared foundation of technology and knowledge to accelerate growth and innovation (Tapscott, 2010). The Chinese exuded greater confidence than ever before and flaunted their economic performance. A visible signs of power shifting to east particularly China were clear and loud. Whether this shift will lead to cooperation or confrontation is a question that hovers on the western and American political and business mindscape. The projections were however marked by cautious...
7 Pages(1750 words)Coursework
sponsored ads
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.

Let us find you another Coursework on topic Keynesian Economic Policies before and after 1970 for FREE!

Contact Us