Keynesian vs classical economics
Anand Kararia
ECN - 211
July 15, 2013
Keynesian vs Classical Economics
Keynesian vs Classical Economics Adam Smith and John Maynard Keynes, two of the greatest economists ever, had two very different ways of looking at the economy. Adam Smith; born June 5, 1723, was a believer in market economics. Smith believed that the people are usually best left to their own decisions, and concluded that the economy would prosper with the elimination of government involvement. Adam Smith published An Inquiry into the Nature and Causes of the Wealth of Nations on March 9, 1776, which is believed to be considered the first modern work in the field of economics. Three main concepts that Smith expands upon within his writings are the division of labor, pursuit of self interest, and freedom of trade. These three main concepts also assisted in the foundation of free market economics. Adam Smith deeply impacted economics in general and helped form some of the various economic systems that are still used today. The "Invisible Hand" is a metaphor created my Adam Smith to describe the self-regulating behavior of the marketplace. Many traces of Adam Smith's work can be found in today's economic systems and structures. He was surely a pioneer to the study and teachings of economics. Comparatively to Adam Smith's work, British lord and economist John Maynard Keynes had a much different perspective on how the economy works and how it should be handled. Keynes had just as much of an influence on economics as Adam Smith. John Maynard Keynes was the founder of Keynesian economics. Keynes believed that in a receding economy, economic depression, or economic downturn of any kind, a temporary solution can be found with government intervention in the market and economy. In his book The General Theory of Employment, Interest, and Money, John Maynard Keynes argued that the markets do indeed fail, and that if individuals or private enterprise cannot or will not
ECN - 211
July 15, 2013
Keynesian vs Classical Economics
Keynesian vs Classical Economics Adam Smith and John Maynard Keynes, two of the greatest economists ever, had two very different ways of looking at the economy. Adam Smith; born June 5, 1723, was a believer in market economics. Smith believed that the people are usually best left to their own decisions, and concluded that the economy would prosper with the elimination of government involvement. Adam Smith published An Inquiry into the Nature and Causes of the Wealth of Nations on March 9, 1776, which is believed to be considered the first modern work in the field of economics. Three main concepts that Smith expands upon within his writings are the division of labor, pursuit of self interest, and freedom of trade. These three main concepts also assisted in the foundation of free market economics. Adam Smith deeply impacted economics in general and helped form some of the various economic systems that are still used today. The "Invisible Hand" is a metaphor created my Adam Smith to describe the self-regulating behavior of the marketplace. Many traces of Adam Smith's work can be found in today's economic systems and structures. He was surely a pioneer to the study and teachings of economics. Comparatively to Adam Smith's work, British lord and economist John Maynard Keynes had a much different perspective on how the economy works and how it should be handled. Keynes had just as much of an influence on economics as Adam Smith. John Maynard Keynes was the founder of Keynesian economics. Keynes believed that in a receding economy, economic depression, or economic downturn of any kind, a temporary solution can be found with government intervention in the market and economy. In his book The General Theory of Employment, Interest, and Money, John Maynard Keynes argued that the markets do indeed fail, and that if individuals or private enterprise cannot or will not