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 10: The Interventionist

Out of all the contributions Keynes has made in the field of Economics, his interventionist approach is probably the one I most agree with. According to Keynes, economies don't stabilize themselves very quickly and require active state intervention to boost short-term demand. Wages and employment too, are slow in their response to the needs of the market, requiring government intervention to keep them on track. I firmly believe that interventionist policies are a massive improvement from the classical inclination to a laissez-faire stance. Such a "leave-it-alone" mentality can be downright harmful for the economy, as absolute autonomy can lead to chaos and mayhem, with private interests taking precedence over overall societal welfare. It also invariably widens the chasms of income inequality. Without government intervention, monopoly power would freely reign and such intervention can regulate markets to function more effectively, as well as cater to public and economic...

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.

Day 2: The King of Macroeconomics

Keynes is regarded globally as the founding father of Macroeconomics. Keynesian economics is a macroeconomic theory of total spending in the economy and its effects on output, employment, and inflation. This theory was the first to make the move from studying individual markets to studying broad national economic aggregate variables and constructs. Macroeconomics as a distinct discipline only came to fruition due to Keynes's seminal work, The General Theory of Employment, Interest, and Money. Through this macroeconomic masterpiece, Keynes introduced the notion of aggregate demand, a sum of consumption, investment, and government spending. He put forth the idea that it is this aggregate demand that drives supply in the economy, and not vice versa like the classicists believed. Therefore, demand is the driving force of the economy, not supply. Keynesian economics thus argues that healthy economies spend or invest more than they save. To create jobs and boost consum...

15 Days of Keynes.

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