Topic > Criticism on Keynes - 425

History of economic thought: The writer begins with an introduction stating that schools of thought were contradictory in their theories. What should have been answered is how and from what perspective: neoclassical or Keynesian? The main points of his article are as follows: “Neoclassicals, such as Friedman, argue that the United States failed to provide liquidity to its banks,” which caused the Great Depression; if the government did not intervene, the economy would head towards full employment. Keynesian economists, on the other hand, believe that the government should actively intervene through fiscal and monetary policy tools to promote full employment and economic growth (with price stability). Furthermore, they believe that the cause of the Great Depression was because the government did not intervene as it should have. The writer assumes that the Great Depression could have been resolved by either the Keynesian or neoclassical method, but does not state the cause or methodology. There may be no right or wrong answer, however, some reason should have been drawn; this approach would clarify which Keynesian or neoclassical remedies are. The writer does not develop the main points throughout the article. She goes on to reiterate the ideas by saying that Friedman believes that the economy is "self-adjusting and self-regulating" and that "Keynesian economists credit good monetary and fiscal policy with leading the economy out of recessions and downturns." growth. I didn't get a sense of which side he was supporting, it seems like he might have been neutral. Also, he didn't state the analysis of the two schools of thought on macroeconomics, which led them to think that their methodology was correct. (according to them.) In reference to monetarists (especially Friedman) he did not mention how they advocated constant and consistent growth of the money supply. In his conclusion, he stated that “human behavior is complex and often difficult to predict. Keynesian and neoclassical economists often try to make sense of the senseless".