Day 8: Keynes the Optimist

For some, Keynes was a messiah who saved the world from the evil clutches of Great Depression, while for others, he is responsible for the mess that the current global economy is in. No matter what you stand by, it is a universal fact that Keynes was a cheery optimist. He was known for his sunny outlook and his ability to see beyond the grim present to better days, even amidst the darkest periods of economic history. He was dedicated to breaking the vicious cycle of economic pessimism that was plaguing his times, constantly reassuring the public that "this too shall pass." He very boldly made claims that when his great-grand children were adults, the world would've solved all its economic problems and the material requisites for a good life would be available to all (in the West).

Keynes's positive mindset withstood the storms of the Great Depression and the Second World War. When the Depression failed to respond to monetary policies, he strived to come up with a new cure for this disease. Keynes vehemently refused to accept the belief of his predecessors that the working classes must simply accept their fates and rather believed that people can design their own destinies.

Keynes helped make the "dismal science" of Economics a little less grim with his injections of positivity and optimism.

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Day 15: Goodbye, Keynes!

"The difficulty lies not so much in developing new ideas as in escaping from old ones." As we come to the end of our 15-day journey exploring Keynesian ideologies, I cannot help but to reflect on how much influence Keynes has exerted in not only the global economy, but in our daily lives as well. His revolutionary mind and endless vigor to challenge existing ideas paved way for new opinions and diverse outlooks in the field of Economics. The discipline was extremely rigid, unaccepting, and wary of alien inputs that varied from existing theories. However, Keynes barged in with his sunny optimism and completely revolutionized economic thinking, thus injecting flexibility in Economics and creating space for differing opinions. Though Keynes has attracted cartloads of scrutiny and criticism, it cannot be denied that his contributions to the field of Economics are invaluable and have definitively shaped the course of modern Economics and how the global economy functions. Present-...

Day 14: Critiquing Keynes

Keynesian ideologies have been widely debated upon, which has led to a bifurcation in academia. Some stand by his ideas and build upon them while others strongly refute his notions and have criticized his work extensively. A critique I find very valid is that of his undue promotion of deficit spending. Keynesian Economics advocates for increasing budget deficits during recession. He failed to acknowledge the crowding out effect that would potentially ensue. For a government to borrow more, interest rates on bonds would rise which would discourage and stifle private sector investments. Yet another critique originated after observing the real world effects of Keynes's suggested expansionary fiscal policies on global economies. Fiscal expansion often tends to show up at a later stage when the economy is on its path to recovery. Thus, instead of its intended effect, it ends up causing inflation. Milton Friedman, Keynes's biggest critic, also provided a very logical argument stat...

Day 11: Tackling the Business Cycle

As emphasized priorly, Keynesians staunchly believe in activist policies to reduce the amplitude of the business cycle. According to Keynes, the business cycle is the root of all economic evils and is the most important of all economic problems. To tackle this, Keynes advocated for countercyclical fiscal policies that act against the direction of the business cycle. For example, deficit spending on labor-intensive infrastructure projects to stimulate employment and stabilize wages during periods of economic downturns. In a situation of abundant demand-side growth, Keynesians would lobby for raising taxes to cool the economy and prevent inflation. They also rely on monetary policies in certain situations (minus periods of liquidity trap) to stimulate the economy, like reducing interest rates to encourage investments.

15 Days of Keynes.

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