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- Classical v. Keynesian Economic Theories of Adam Smith and John Keynes
- By: Gisselle
- I think there should be little government intervention because competition would be better off if there are not so many rules the people have to abide by.
- I prefer to have a more hands-off approach that includes freedom, competition, and justice for prosperity. Everyone working on things separately like being able to make and trade for things freely would have a better outlook for the economy. This is good because it creates competition in the market.
- The government should involve itself in order to help fix or prevent some of the problems that can occur in the economy. For example, they could borrow or spend money.
- I believe that the economy is spurred by consumer spending. In order to regulate help regulate the economy and keep people at ease, consumption, Investment, and trading should be regulated. If left alone, it could cause problems in employment, inflation, and production.
- I can agree with some things on both theories, but I would say I see Adam Smith's Classical Theory as true a majority of the time. For example, I believe supply creates demand because if you don not have something that is in demand you cannot create more of it if there are no resources. For this same reason I agree with him that aggregate demand determines price level and aggregate supply determines output and employment. I can see however, how inflation can be caused by both too much money and too much demand. I do think sometimes the government involving themselves helps some aspects in the economy to be cohesive and flow, but I think the people can do a good job of regulating the economy as well.
- Well I, Roy Forbes Harrod, and John Richard Hicks look forward to John Maynard's Keynesian Economic Theory.
- We, David Ricardo and Jean-Baptiste Say, agree with Adam Smith's Classical Economic Theory!
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