John Maynard Keynes: Who Was He?
JM Keynes was a British economist of the early 20th century He is famous as the father of macroeconomics and Keynesian economics founder. Keynesian Economics is also sometimes known as Depression Economics. Keynesian Economics recommends a demand-side solution to deal with recessions. The intervention of the government forms an important part of Keynesian Theory.
Keynes developed the Keynesian Theory of Employment in his book “The General Theory of Employment, Interest, Money” (1936). Monetarism is a branch of Keynesian Economics, and it advocates the use of Monetary Policy over Fiscal policy to deal with various economical problems.
Who is JM Keynes?
Lord Keynes had excellent performance in Mathematics during his academic career, and he did not have any formal training in Economics. In his early career, Maynard Keynes held official positions in the British Civil Service and the British Treasury. He was also the British Treasury’s financial representative in 1918 at the Versailles Peace Conference that ended World War 1.
JM Keynes
Economists and Their Theories Opposing J M Keynes
There were many economists and their theories opposing Maynard Keynes's views. Melton Friedman was the most famous critic of Keynesian Economics. Milton Friedman was an American economist, and he advocated free-market capitalism. Friedman supported monetarism which was in contrast to Keynesian economics.
In contrast to Keynesian theory, Friedman and his fellow economists believed that economic stability could be achieved by controlling the money supply in the economy. Keynesian economics strongly opposed Laissez Faire Economics. Laissez Faire Economics is based on the theory that minimum government interference in economic affairs should exist.
John Keynes Quotes
JM Keynes Quote
John Keynes's quotes are very famous and useful in economics. One of his quotes was- “In the long run, we are all dead”. This quote was given by him when his critics argued his theory by saying that in the long run, public financing and deficit spending will lead to default. John Keynes responded, "In the long run, we are all dead”. By this, he meant that government policies should be able to sort out the problems in the short run since we are all dead in the long run.
Keynesian Economics Theory
British Economist John Maynard Keynes, during the 1930s, developed Keynesian Economics to understand the Great Depression. This Economics is a demand-side-driven theory and is based on the belief that with the help of government intervention, a nation's economy can be stabilised. The main focus of this economics is centred around government intervention to manage aggregate demand to prevent situations like recession and depression.
This theory believes that when aggregate demand is increased through government policy intervention, the performance of any economy can be optimised. Keynesian economics is based on the belief that aggregate demand and aggregate supply are governed by effective demand. Employment and income depend on effective demand.
Keynes developed this theory to deal with the situation of the Great Depression. Keynesian Economists recommend fiscal and monetary policy as the primary tools to manage the economy and fight the menace of unemployment. Keynes's fiscal stimulus theory states that when the government spends money, it leads to an increase in business activity which generates more income and thus increases the GDP. The growth in GDP can be greater than the stimulus amount spent by the government initially. Keynesian Economists believe in saving less and spending more principle so that full employment and economic growth go on together.
Summary
Keynesian Economics' central idea is that the government can pull an economy out of a recession by infusing capital into the economy. This implies that by increasing consumption or spending, economic recovery can be made. Milton Friedman, a critic of Keynes, supported monetarism. Friedman was a famous economist of the second half 20th century.
FAQs on John Keynes Quotes
1. List some of the famous quotes of John Maynard Keynes.
Some of the famous John Keynes quotes are:
“When my information changes, I alter my conclusions. What do you do, sir?”
“The long run is a misleading guide to current affairs. In the long run, we are all dead.”
“Capitalism is the astounding belief that the wickedest of men will do the wickedest of things for the greatest good of everyone.”
“It is better to be roughly right than precisely wrong.”
“If you owe your bank a hundred pounds, you have a problem. But if you owe a million, it has.”
2. What is John Maynard Keynes best known for?
John Maynard Keynes is best known for his work, The General Theory of Employment, Interest and Money, published in 1936. John Maynard Keynes is regarded as the father of modern macroeconomics, and it is after him that Keynesian economics got its name, theories and principles. Keynesian economics supports countercyclical fiscal policies and advocates government deficit spending that generates economic employment. Keynesian economics was developed by John Keynes to understand the Great Depression of the 1930s.
3. Write a short note on Keynesian Economics.
The theories of John Maynard Keynes are known as Keynesian Economics. Keynesian Economics is against Laissez Faire economics; it does not support free market reign and believes that government interference is essential in combating economic downturns like recession and depression. Keynesian economics's principle is that aggregate demand is the economy's driving force. The aggregate economic demand can be increased by infusing government capital, which increases consumption and spending.
