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Keynesian Dominance in Crisis Therapy

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  • Kristina Spantig

    (Graduate Programme "Global Financial Markets")

Abstract

This 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.

Suggested Citation

  • Kristina Spantig, 2013. "Keynesian Dominance in Crisis Therapy," Global Financial Markets Working Paper Series 45-2013, Friedrich-Schiller-University Jena.
    • Handle: RePEc:hlj:hljwrp:45-2013
    as

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    File URL: http://pubdb.wiwi.uni-jena.de/pdf/wp_hlj45-2013.pdf
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    References listed on IDEAS

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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Why Keynes dominates Hayek
      by Economic Logician in Economic Logic on 2013-10-28 19:43:00

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    More about this item

    Keywords

    Keynes; discretionary fiscal policy; monetary policy;
    All these keywords.

    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; Modern Monetary Theory
    • 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; Modern Monetary Theory

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