Abstract During the 1970s people in Canada (and elsewhere) lost faith in Keynesianeconomics, laying the groundwork for the decline of the Keynesian welfare state, and the rise of neo-liberalism. Neoliberalism favoured the unfettered economic power of private property, and the rise of neo-liberalism signaled the beginning of the globalization of the world economy. This change was therefore a dramatic and important shift, which continues to impact our world profoundly today. This essay examines the reasons for the loss of faith in Keynesianeconomics in the 1970s in Canada.
Abstract This paper reviews the scholarly literature to determine what the advocates and the critics have to say about Keynesianeconomics and how well it works, or does not work, followed by an analysis and a summary of the research in the conclusion.
Outline
Review and Discussion
Overview and Background
What the Advocates of KeynesianEconomic Say
Analysis
Conclusion
From the Paper "Today, economists have a number of sophisticated tools at their disposal that can be used to examine the relationship between markets for final goods and services or to markets for labor, capital, and other factors of production as well. These analysis can be applied at the level of the firm, the industry, or the entire economy. The total demand for all goods and services by all sectors of the economy determines the aggregate income in the economy. As a result, income is tied to production, and a circular relationship exists between production, income, and final demand. Further, the same can be said of the relationship between the supply of factors of production and the compensation offered, as in the case of unemployed workers who would theoretically accept work at the going wage if it were available. However, these frameworks for understanding economic demand are fairly recent innovations, and rely on the modern concepts of labor, land and capital that simply did not exist a few hundred years ago."
Abstract This paper explains, in contrast to the classical view that demand should be held relatively stable or static, Keynes believed that government spending was necessary to inflate production and infuse the economy with necessary dollars; the Neo-Keynesians applied neoclassical economic theories of monetary policy and the micro economy to Keynesianeconomics regarding the macro economy. The author defines the 'price output puzzle' as "why do not suppliers reduce prices rather than reduce supply?" This paper concludes that the major three functions of both the Keynesian and Neo-Keynesian theories, which include the consumption function, the investment function, and the liquidity preference function, should all be considered simultaneously, viewing the economy in a holistic fashion.
From the Paper "Specifically, the first Neoclassical-Keynesian Synthesis is another way of referring to the Neo-Keynesian Revolution of the so-called IS-LM Model. The IS-LM model represents John Maynard Keynes's General Theory in the form of a system of simultaneous equations "The IS-LM model has remained one of the most formidable pieces of pedagogic machinery and, as far as back-of-the-envelope diagrammatic reasoning is concerned, one of the most efficient ever devised in economics. It is not, however, without substantial problems, both as an internally consistent model or as a representation of Keynes's theory." In other words, this Neo-Keynesian school works wonderfully in theory, but not so well in fact."
Abstract This paper explains that Keynesianeconomics would not be so optimistic regarding Bush's dividend tax cut proposal primarily because of their assumption that investment spending is driven more by expectations of future profits that are difficult to forecast. The author believes that the Bush tax plan essentially agrees with Keynes regarding the important role of consumer demand in stimulating the economy. The paper points out that Keynes and Bush radically differ on which category of consumers should receive the benefits of the tax cut: Bush is clearly placing more money in the hands of the wealthy.
From the Paper "Keynes disagreed with supply-side methods for promoting vast degrees of income inequality. Instead, shifting income from high savers to high spenders, Keynes argued, would increase investment since firms would have more reason to add increased production capacity. Keynesians advocate using "automatic stabilizers" to counteract alleged instability in the economy. Keynesians argue that progressive income taxes and welfare payments counter variations in aggregate demand. Progressive income taxes and Welfare transfer income from upper income households to lower income households. Since upper income households save more of their income and low-income households consume more of their income, these practices keep aggregate saving low and aggregate consumption high."
Abstract This paper examines two contradictory quotations regarding the same economic scenario and questions why the markets should fear a predicted economic slowdown if company profits are growing strongly. The paper presents the answer in the form of the "Keynesian Aggregate Expenditure" model, which is the generic term for several graphical models used to analyze the basic components of Keynesianeconomics and to identify Keynesian equilibrium as the intersection of the aggregate-expenditures line and the 45-degree line.
From the Paper "In other words, if consumers are spending less, it is unlikely that companies will continue to spend more and thus the companies will have to let workers go to make up for the decrease in consumer demand. The Keynesian model of aggregate demand was introduced in the 1930's as a answer to the worldwide great depression that the global economy found itself spiraling into after years of boom and financial speculation. Keynes departed from his predecessors when he ?rejected the view of Adam Smith that, left alone, a market system generally functions well,? namely that the "invisible hand? works when consumer confidence is low.? (Schenk, 1997, "Activism")"
Abstract This paper discusses what distinguishes the Keynesian school from the New-Keynesian school. A summary of the schools' major theories are examined and analyzed.
From the Paper "What did the economist John Maynard Keynes really mean when he wrote his seminal text, The General Theory of Employment, Interest and Money? Like a religious text, General Theory was written and yet has inspired more verbiage upon its supposed core philosophy than exists within the actual pages of the book itself. This text was itself a critique and a query of conventional views of Classical economics. The Classical and the Neo-classical view of economics Keynes was responding to suggested that with perfectly free competition, in the absence of government intervention, the nature of the relationship between wages and labor demand would be quite efficient and simple."
Abstract This paper uses the example of the increasing monopolization of the telecommunications industry to demonstrate the need for economic models that can help resolve issues of monopolization. The paper describes the purpose of economic models, the different types of models, and some of the factors and data that the models consider.
Outline
An Agent-Based Economic Model
Telecommunications market structure, development, and impact studies
Demand analysis and forecasting studies, modeling
Service and Network Cost Studies and Models
Comparative tariff, policy, and market analyses
Tariff Model -- International Comparisons
OECD Basket Comparisons of Telephone Services Charges - August 1997
Multivariable Regression
The Classical Model
The Classical Model of Production and Employment
Labor Demand
Labor Supply
Equilibrium
Aggregate Supply and Demand
Loanable Funds
Taxes on Labor Income
Animal Spirits
The Keynesian IS/LM Model
Tax Model (The Simple Keynesian Model)
Paradox of Thrift
The Mundell-Fleming Model
Real Business Cycles
The IS/MP Model
From the Paper "With the agressive deregulation in the telecommunications industry in the United States and Europe during the early to mid-1990?s, it seemed that the local monopolies would be forced to unbundle their networks. However, MCI WorldCom, the second largest US long distance telecommunications company, announced in October 1999, that it would acquire Sprint, the third largest US long distance company, in the biggest corporate takeover in history. The merger is valued at $129 billion in cash, stock and debt. The resulting firm will be second only to AT&T in the US telecommunications industry, a company with, as of 1999, $65 billion in annual revenue, 142,000 workers and 40 million business and residential customers (McGaughlin, 1999)."
Abstract The paper discusses the historical background of the development of the welfare state and offers definitions of the terms Keynesianism and neo liberalism. The paper analyzes the shift from an earlier system to the Keynesian one and then to the neo liberal one and explains the interests involved in the process. Overall, it can be said that the welfare state and the neoliberal one are two distinctive theories which in today's world tend to be combined in a state which promotes free competition and liberal market principles but at the same time take more into consideration the idea of social protection and social assistance, particularly because of the electoral significance of such measures.
Outline:
Historical background
Definitions
Effects of the End of the Fall of the Welfare State and the Emergence of the Neoliberal Mechanisms for the Social Assistance System
From the Paper "The Second World War represented one of the most significant periods in the history of human kind because its effects were determinant for the following decades in terms of economic development, social behavior, as well as cultural changes. However, one of the most important aspects which are to be taken into consideration when discussing the effects of the World War is strongly related to the economic environment which followed it. In this sense, the economic practices and policies changed in order to cater for the needs of a global society recovering from a world conflagration which placed under pressure the entire economic system. In this context the various theories that tried to explain the evolution of the economies have managed to create different systems that would eventually set in motion the resources of the world."
Abstract This paper summarizes the economic and political thought of key economists and classifies them according to the level of government control on the economy. Karl Marx and Friedrich Engels, who believed in the public ownership of productive property, are the advocates of strong, centralized government control. At the other end, Adam Smith, Joseph Schumpeter, Ludwig von Mises and Milton Friedman all espoused laissez faire economics. The middle ground is the fiscal policy of John Maynard Keynes. The second part of this paper discusses why the Keynesian model is both informed by and compatible with Christian principles. In the third part the writer recommends against increasing government regulations on the United States economy in the face of technology such as Napster and cloning. Instead, he argues that a careful application of Keynesian programs would ensure that the Unites States economy remains healthy and competitive.
From the Paper "The fact that capitalism continues to flourish, despite the predictions of Marx and Schumpeter, are testament to this economic system's primacy. Though they had different reasons for sounding capitalism's death knell, Marx and Schumpeter made a common mistake by underestimating how much technology revives capitalism. Marxist scholars such as Lenin later showed how capitalism has involved into imperialism, given that technology allows capitalists to extend their private ownership beyond the nation-state. Schumpeter, on the other hand, did not anticipate how these technology such as the internet have given rise to a new kind of ?daring entrepreneur,? who have in turn created new industries and opened new markets."
Abstract This essay analyses the economic reforms carried out during the 1980's and 1990's in Australia. The essay looks at the reasons for the changes as well as the impacts of such reforms. Finally, the essay questions whether such reforms worked to benefit the Australian economy and people. During the 1980's and 1990?s, the institutions of economic governance changed in response to poor economic performance, globalisation, and technological developments. The major change was a shift from Keynesianeconomic policy to microeconomic policy. The purpose of this essay is to examine the impacts of liberal reforms and to address any continuing questions.
From the Paper "During the 1980's and 1990?s, there were various changes carried out. One such change was a decline in tariff protection. In 1974, the Whitlam Government announced a 25% across the board tariff cut (Quiggin, 1996), followed by the Hawke labour government further reducing tariffs to 5% over a period ending in 1992 (Quiggin, 1996). In 1993, Paul Keating effectively enacted a zero tariff campaign. Apart from several troubled sectors such as textiles and car manufacturing, the zero tariff result was achieved under the Howard government in the last years of the century (Brennan & Pincus, 2002). Following the recommendations of the Campbell and Martin Committees of Inquiry, another microeconomic reform occurred in October 1983, with the floating of the Australian dollar."
A discussion of the feminist position that the neoliberal ideology that has replaced Keynesianeconomic structures has had the effect of marginalizing women.
1,350 words (approx. 5.4 pages), 0 sources, 2006, $ 53.95
Abstract The replacement of Keynesianeconomic structures with the neoliberal ideology and policy initiatives in the last decades of the 20th century has led - in the opinion of many feminists - to a modern "new gender order" within which the increasing privatization of social reproduction has increasingly marginalized women by limiting their roles in the paid workforce with the social and economic autonomy that these roles signify. This essay argues that an understanding of these processes is critical to any effort at challenging the neoliberal convergence of social reproduction in economic, social and political aspects.
Abstract Summary: Without doubt, there has been a movement away from the Keynesian Welfare State in Canada. This change occurred because fiscal conservatives have taken over in this country. Three of these dimensions involve health care, unemployment insurance and basic social assistance of all kinds.
From the Paper "The New Deal, instituted by President Franklin D. Roosevelt in 1933, and conventionally dated as having continued until the outbreak of the European war in 1939, marked an epochal change in American domestic policy and in the role of the Federal government in American life. It also marked a major transition in Western economic thought. Until the New Deal era, the range of economic choices available was starkly simple: classical orthodoxy or Marxism. For policymakers in Western countries, that was effectively no choice at all, so for practical purposes classical laissez-faire economics reigned supreme. Government was admitted to no major role in economic life. "
Abstract This paper examines how the study of economics focuses on how individuals, corporations, and societies choose to use scarce resources provided by nature and previous generations. It looks at how fields of economics include taxes, banking, international trade, economic theory, and comparative economic systems. Outline Microeconomics Positive and Normative Economics Laissez-Faire Command Economy Mixed Economy Laws of Supply and Demand Government Intervention Post KeynesianEconomics International Economics
From the Paper "Microeconomics is the study of economic behavior. Microeconomics focuses on what factors affect individual economic choices and how changes in these factors alter these individual economic choices. Macroeconomics considers the combined effect of individual choices on the overall performance of the economy as reflected by such measures as the nation's price level, total production, and level of employment. Macroeconomics deals with a country's overall economy including the country's input and output. It also includes the GNP (Gross National Product), which is the total value of goods and services produced in an economy in a certain period of time, usually a year."
Abstract This paper examines the United States' past and future economic policy, with the purpose of recommending future economic policy to the President of the United States. The first part of this paper summarizes economic development over the past ten years. This includes unemployment, deficit spending, trade imbalance, and inflation. Part Two of this paper suggests economic policy direction for the coming years.
From the Paper "There are a number of given reasons by economists to explain the end to the economic expansion that the nation experienced during most of the Clinton years. Some blame the Federal Reserve, (Solmon, Zycher, 2001) for the downturn in 2000. Alan Greenspan is credited by many for excellent stewardship of the nations economic health during the 1990s. However, starting in 1999 and into 2000 many point to Greenspan's hiking of the interest rate one or two times too many in contributing to the reversal of economic fortune in the country. To compound to problem, he then waited too long to reverse the interest rate hikes as the economy softened. (Solmon, Zycher) The Federal Reserve Board eventually brought the interest rate down to 45-year lows, but the benefits of "cheap" money has taken a while to kick in."
