Keynesian Dominance in Crisis Therapy
AbstractThis paper scrutinizes the debate of Keynes and Hayek concerning the adequate re- sponse to economic crises from a historical perspective. In a first step the develop- ment of the Keynesian economic theory, its ascent during the Great Depression and its use during financially sound times is analyzed. In a second step the Hayekian cri- tique to discretionary government intervention and its long run consequences is scru- tinized. In the last step it is analyzed why, in the wake of a crisis, short-run oriented Keynesian therapy dominates long-run Hayekian therapy as in the most recent crisis.
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Bibliographic InfoPaper provided by Friedrich-Schiller-University Jena in its series Global Financial Markets Working Paper Series with number 45-2013.
Date of creation: 22 Aug 2013
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Keynes; discretionary fiscal policy; monetary policy;
Find related papers by JEL classification:
- B20 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - General
- E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-09-28 (All new papers)
- NEP-HIS-2013-09-28 (Business, Economic & Financial History)
- NEP-HPE-2013-09-28 (History & Philosophy of Economics)
- NEP-MAC-2013-09-28 (Macroeconomics)
- NEP-PKE-2013-09-28 (Post Keynesian Economics)
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