The Enduring Keynesian Charm
Was Lord Keynes Right or Wrong? Keynesian Economics, is used to represent a classic view that argues, that private sector activity sometimes leads to distortion of macro economic conditions. Years of economic turmoil have re-ignited the debate about Keynesianism. As the financial crisis caused mass unemployment, Keynes appeared to have been proven right. But even after years of financial stimulus(read Keynesian-inspired deficit spending) high unemployment persists and public confidence in Keynesian policy is shaken. As the United States is stagnating and as Europe is crashing down, critics of the Keynesian theory feel vindicated. This presents one of the most daunting paradoxes of modern day economics. Is Keynes right or is he proven wrong. The answer probably lies in dissecting the Keynesian thought and removing the diagnosis from the treatment. While all modern economists will agree “ free market will periodically fail to utilize all the capacity in the ...