Economics

John Keynes who lived 62 years left a footprint on the sand of time in the area of macroeconomics. He was a British economist with great work done that became the central idea in modern economic practices today. His popular work was on The General Theory of Employment, interest and money. Though died about 9 years post publication of his work, his memory remains fresh in the field of economics for what is known today as Keynesian revolution. His book touched vital areas relating to the forceless yielding of market economy to stability in response to aftermath of shock which is evidenced by full employment. The idea he raised ignited curiosity amidst colleagues experts, thus, leading to further research and subsequent advancement in macroeconomics. John Keynes contested classical economics idea on the derivation of employment using labour price as a gauge, stating however, that the influence of aggregate market (money influx) informs the extent of employment.

John Keynes condemned old classical economics idea, stating
The characteristics of the special case assumed by the classical theory happen not to be those of the economic society in which we actually live with the result that its teaching is misleading and disastrous if we attempt to apply it to the facts of experience.

Keynes protested that it would be myopic to assert that full employment is brought about following long term moments of competition adding that full employment takes a natural course to a state of equilibrium. With this background, modern economists now argue that institution of economy policies including provision of flexible market, among others, are determinant of equilibrium. The General Theory introduced phenomenon that explains the central ideas articulately the concept of consumption and employment function, the marginal propensity to consume and multiplier effects.

He theorized that the absence of competitive market does not form the basis to reduce unemployment by cutting down wages, attempting this was described as futile effort. He argued for a need to establish government policies aimed at reducing the interest rates, reformation of exchange monetary systems among nations as this will facilitate investment growth and spinning of private sector. Following a massive shock of great economic regression, the application of Keynesians theory in late 1930s suffered a serious setback about 40 years later with signs of inflation. This is an area where Keynesian theory received advancements over time by succeeding economists.

The use of Keynesian theory in addressing the recent economy melts down was agitated for by experts. As such the theory found a substantial use in the economy when it was at greatest brink of irreversible collapse with the US announcement of a fiscal stimulus. This is one of the Keynesians objective factors that encourage the consumption function. In his work on fighting off depression, a Nobel laureate Paul Krugman submitted in 2008 that one of the worst economic conditions had returned, making the use of Keynesian policy prescriptions a more significant economy tool.