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classical and keynesian economic theories
classical and keynesian theories
keynesian school of thoughty
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Part B of this essay I will be defending John Meyer Keynes and his view that government should have a role in an economy. Before then I will give you a brief biography on John Maynard Keynes
John Maynard Keynes was born in Cambridge 1883. He wrote the book the economic consequences of the peace which was published in 1919. He thinks that the government should be involved in the market place this is also called the Keynesian theory. John Maynard Keynes believed that by using a fiscal or monetary policy. Fiscal is when are government uses taxes to have an impact on our society. Monetary is when the government controls the supply of money and directs it to support economic growth and stability.
Sole proprietors is an owner or an entrepreneur who takes risks in a market place such as H&H Hunter hardware store in middle field ,Ohio who was in business for more than ten years that had to compete with Walmart and eventually ran out of business because Walmart sells lower prices. Ma and Pa cooperation’s like Hunter and Hardware could not sell any lower than Walmart so they ran out of business. Hunter and Hardware store was devalued because of inflation. Any time a Walmart comes into town they knock the values down and many stores can not compete. Walmart drives down retail wages 3 billion dollars every year.
Employee states that Walmart is purposely short staffed and they also keep the number of associates from being full time as much as they can and keep them part time as much as they can to keep reducing those expenses. The company do not allow the store to get enough pay role dollars to get the job done. They do not care about anything but the bottom line profit for that store. The money that employees did get went back into Walmar...
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... outside, where it can be wash away into the river because of rain. This may eventually run into the Catawba River. Donna calls corporate Walmart about how this may be hazardous to the environment and if they could do something about it and they still do nothing so Donna blogs all of their responses and takes it to the press.in 1999 Walmart construction was halted in the state of Pennsylvania due to environmental violations in 2001 EPA orders Walmart to pay 1.0 million fine for clean water violations in Texas, Oklahoma and Massachusetts and an additional fine in 2004 from the EPA of 3.1 million for clean water act violations.
Walmart claims they have a great relation with Chinese government and hold them to a higher standard of sanitation and of employment. Princess is a Walmart factory employee in china, who decided to work to make her families living much easier.
I believe that it's’ important to use our constitution as a guiding tool to help appoint the correct people for the job.John Maynard Keynes was a British economist where he fundamentally changed the theory and practices of macroeconomics and economic policies of government. Although he was revolutionary most of his policies were controversial and used Keynesianism economic to get people to stay away from them . His approach to macroeconomic management was different since the previous traditional laissez-faire economists believed that an economy would automatically correct its imbalances and move toward a state of equilibrium, They expected the dynamics of supply and demand to help the economy adjust to recession and inflation without government action. Laissez-faire economics thus regarded layoffs, bankruptcies and downturns in the economy not as something to be avoided but as elements of a natural process that would eventually improve. However that was not the case for the great depression. Keynes also believed that a given level of demand in an economy would produce employment however he insisted that low employment during the depression resulted from inadequate
To this day, when I walk into Wal-Mart and come face to face with a manager I once worked under they give me dirty looks. People report that managers will trash talk you to another job that applied for if that job contacts Wal-Mart about you. Wal-Mart has unrealistic workloads for some overnight stockers, their managers aren’t the best in the world, and their policies are harsh. This is why I constantly call Wal-Mart a communist regime; not because it shares the ideals but because it is just bad for everyone in general. Hopefully one day a high positioned power will restore the order and peace that once was Wal-Mart according to the history they teach you in training and that their policies and workloads may become more realistic and doable.
Some people raise a concern about employment practices with Wal-Mart. There are definitely two sides to this argument. Wal-Mart has been sued recently for allegedly making employees work overtime, off the clock, in order save money in payroll expenses. There has also been concern of the amount of money that Wal-Mart pays employees. Many employees have complained of being paid only minimum wage for extended periods of time. On the other hand, Wal-Mart has created thousands of jobs in small communities when stores open up. This has helped many communities that struggle with high unemployment rates. Another thing that Wal-Mart has done is allow anyone displaced by hurricane Katrina to be placed in a job at any other Wal-Mart in the country. One other questionable employment practice that has been brought up by employees is discrimination. Wal-Mart has been the plaintiff in many discrimination law suits in recent years, claiming that Wal-Mart discriminates in many ways against women and minorities. I guess the employment practices of Wal-Mart could be looked at as favorable or unfavorable depending on how you look at it. However, one has to wonder if Wal-Mart creates programs like the hurricane Katrina program just in order to create positive publicity.
Regardless, in regards to applying Keynesian economic policies toward the Great Depression, Former Federal Reserve Governor Ben S. Bernanke said “You 're right, we did it. We 're very sorry. … we won 't do it again” (Federal Reserve Board, 2002). Other economic theory must be developed to address some of the shortcomings of the Keynesian economic
The quality jobs that come with a Wal-Mart store provide employment and income to the members of the local community. A small retailer is most likely a family run business offering only a few jobs with little upward growth for those employees. In comparison, a single Wal-Mart store may offer around five hundred jobs. While most of the jobs are low wage jobs, Wal-Mart is not much different that other retailers (De Coster and Edmonds 632). However, those jobs at Wal-Mart come with competitive wages and comparable benefit packages to other ret...
Today Wal-mart has a higher GDP than the entire country of Switzerland, but don’t worry they’re pretty neutral about it. But there has also been news about how they treat there employees. In 2004 an article was released entitled Everyday Low Wages: The Hidden Price We All Pay for Wal-Mart, and soon after Washington got involved. The bad publicity took a toll on Wal-mart and in fact is still today, Maryland passed a law in January, 2006, that said larger employers, such as Wal-mart, must spend at least 8% of their payroll on health benefits for their employees, and now many other states have followed suit. The bad publicity also made it so 8% of customers shop elsewhere because of what they’ve heard, this has caused lower expected sales around the holidays during 2004, and 2005. Some things they’ve done is in 2006 they paid employees on average 9.36 dollars, while other major retailers like Target and Sears pay on average 11.08 dollars. While this can be easily denied by Wal-mart, another way they have gained bad publicity is from something called off-the-clock work. If they had not finished their job they had to clock out and then still finish their job, meaning they wouldn’t get paid for
In the book “The General Theory of Employment, Interest and Money” from 1936 John Maynard Keynes says that capitalism was unstable and would rarely provide full employment. the government would need to spend giant amounts of money on public works, which would create new jobs, expand demand, and rebuild consumer confidence. He also says ...
Public policy is enormously impacted by the importance of economic beliefs about the political world. Throughout history, there have been two prominent models of economic policy; Keynesianism and Neoliberalism. The increase of authoritarianism intermingled with the rise of communism essentially started World War 2. After this, the government instituted Keynesianism until the late 1970’s. After the stagflation of the late 1970’s, the political and economic movement of Neoliberalism began.
John Maynard Keynes, British economist, journalist, was born on June 5th 1883, in Cambridge, England. His father, Dr. John Neville Keynes, was an economist and a philosopher. Keynes attended Eton and then Cambridge University. At first he studied Mathematics but then turned his attention to Economics when he was offered the job at the British treasurer after the First World War when the British economy was at pressure. A man who gained a modicum amount of wealth during 1919 to 1938, married to Lydia Lopokova in 1926 and passed away in April 21st, 1946. Keynes believed that price level has to be stabled in order to have a stabled economy, and that is only possible if interest rates go down when prices rise. He also believed that the market forces alone will not deliver full employment but boosting government spending (main force of the economy in Keynes theory) will aim in his theory full employment or close to that. He believes by Governments intervening and spending will finally stop recession, unemployment and most importantly depression. For spending will increase the aggregate demand of the economy.
John Maynard Keynes classical approach to economics and the business cycle has dominated society, especially the United States. His idea was that government intervention was necessary in a properly functioning economy. One economic author, John Edward King, claimed of the theory that:
...ir employees without their knowledge at all. Because of their prices being low, wage is even lower to make an over decent profit. Wal-Mart is a growing competitor to those who have enough trouble just surviving. It is easier for everyone just to back-off and let them do what they want, but they have taken advantage of that and the people do not like that.
The theory of economics does not furnish a body of settled conclusions immediately applicable to policy. It is a method rather than a doctrine, an apparatus of the mind, a technique for thinking, which helps the possessor to draw correct conclusions. The ideas of economists and politicians, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist." (John Maynard Keynes, the General Theory of Employment, Interest and Money p 383)
The disparities between the two views of the economy lead to very different policies that have produced contradictory results. The Keynesian theory presents the rational of structuralism as the basis of economic decisions and provides support for government involvement to maintain high levels of employment. The argument runs that people make decisions based on their environments and when investment falls due to structural change, the economy suffers from a recession. The government must act against this movement and increase the level of employment by fiscal injections and training of the labour force. In fact, the government should itself increase hiring in crown corporations. In contrast the Neoliberal theory attributes the self-interest of individuals as the determinant of the level of employment.
Ferguson, S (1999) Keynesian Theory and its implication, College of Management and Economics, Canada University, 298-312
My research of Classical Economics and Keynesian Economics has given me the opportunity to form an opinion on this greatly debated topic in economics. After researching this topic in great lengths, I have determined the Keynesian Economics far exceeds greatness for America compared to that of Classical Economics. I will begin my paper by first addressing my understanding of both economic theories, I will then compare and contrast both theories, and end my paper with my opinions on why I believe Keynesian Economics is what is best for America.