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Research the writings of Robert Skidelsky and Paul Krugman and summarise their explanations and remedies for the recession, drawing comparisons as appropriate, to Keynesian theory about recession - Essay Example

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The Keynesian economics explanation of recession and depression heavily relies on the premise that the actions of the public and private sectors have a direct influence on aggregate demand (Vitez, 2011, p1). The government plays an important determining factor regarding the…
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"Research the writings of Robert Skidelsky and Paul Krugman and summarise their explanations and remedies for the recession, drawing comparisons as appropriate, to Keynesian theory about recession"

Download file to see previous pages By avoiding a fall in aggregate demand, the government avoids excessive and wasteful supply, controls unemployment and shields the public from unprecedented fluxes in prices of consumer goods.
The free market masterly of consumer behaviour and its application in determining the performance of the economy is an important element of the private sector. Reaction of the market to unwanted effects can create general glut or recession by avoiding the burden, but the government chips in to rescue the national economy by jump-starting the appropriate response as a public protection outfit. In Keynesian theory, government spending and involvement in the economic equation are therefore incorporated into the classical explanation of how the economy responds to the free market forces of demand and supply (Tucker, 2008, p221). Recession can therefore be avoided by government intervention through fiscal and monetary policies according to the theory.
Robert Skidelsky position observed in several pieces of his work demonstrates the common knowledge that private and public sectors are equally important in the economy (Skidelsky, 2010, p1). The author points at the importance of harmonising government intervention with recovery of the private sector towards deficit reduction. It is evident that sustained recovery can only be realized through budget regulation, employment growth and economic growth on government input. Government policies mentioned in Keynesian theory are also revisited by the author in explaining how a well coordinated plan to tackle recession is developed.
In Kennedy and Skidelsky (2010, p1) there is a direct link between the need to mobilize government involvement in preventing total spending to sustain recovery from the recent recession. To consolidate recovery from recession, there must be a balance between public and private spending through involvement of the government. In the reduced spending of a recessed economy, the government can induce ...Download file to see next pagesRead More
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