WORLD FAMOUS ECONOMISTS AND THEIR CONTRIBUTIONS - JOHN MAYNARD KEYNES

JOHN MAYNARD KEYNES

            1883–1946

·         He was a British economist whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments.

·         He built on and greatly refined earlier work on the causes of business cycles, and is widely considered to be one of the most influential economists of the 20th century and the founder of modern macroeconomics.

·         His ideas are the basis for the school of thought known as Keynesian economics and its various offshoots.

·         In the 1930s, Keynes spearheaded a revolution in economic thinking, challenging the ideas of neoclassical economics that held that free markets would, in the short to medium term, automatically provide full employment, as long as workers were flexible in their wage demands.

·         He instead argued that aggregate demand determined the overall level of economic activity and that inadequate aggregate demand could lead to prolonged periods of high unemployment.

·     Keynes advocated the use of fiscal and monetary policies to mitigate the adverse effects of economic recessions and depressions.

Keynes had the following ideas :

Ø  The market for goods controls employment and production. The market for work does not.

Ø  It is possible that people become unemployed even if they want to work.

Ø  An increase in savings will not lead to an increase in investment of the same amount. People have the choice between investing their money or saving it.

Ø  An economic system based on money is different from one that is based on the exchange of goods.

Ø  The quantity theory of money is only valid if there is no unemployment.

Ø  In a market economy, investor behavior is governed by what Keynes called the animal spirits of investors.

SOME OF HIS FAMOUS QUOTES

·         “The long run is a misleading guide to current affairs. In the long run we are all dead.”

·    “Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.”

·       “It is better to be roughly right than precisely wrong.”

·         “The difficulty lies not so much in developing new ideas as in escaping the old ones.”

·         Ideas shape the course of history.

·         If economists could manage to get themselves thought of as humble, competent people on a level with dentists that would be splendid.