Fear the Boom and Bust:http://www.youtube.com/watch?v=d0nERTFo-Sk
and Part II of the Epic Battle at:
Fight of the Century: http://www.youtube.com/watch?v=GTQnarzmTOc
Identify at least 3 points from either Economist that you agree with. List the point and the video that it came from. Don't copy your classmates responses.
24 comments:
I identify myself more with Keynes than Hayek.
I agree that we should have government controlled (steered) markets rather than free markets because we need guidelines in our economy. – Round 1
I also agree that there should always be more government spending when there is going to be or there is a recession because it would stimulate people to spend to help the economy recover. – Round 1
I also agree that in the “long run” we are all dead because there is no perfect system and no system that can last for eternity. – Round 1
KEYNES
1. Anything that leads to a fall in a nation’s aggregate demand will cause a relatively mild fall in prices in the economy but a significant decline in the real GDP.(K vs. H 101)
2. Through well planned economic policies, governments and central banks could intervene in a nation’s economy during periods of economic downturn to return the economy to its full-employment level, or the level of output the nation would be producing at if everyone who was willing and able to work was actually working.(K vs. H 101)
3. Aggregate demand is the most vital measure of economic activity in a nation, and that through its use of fiscal and monetary policies, the government and central bank could provide stimulus to a depressed economy and create demand for the nation’s resources that would help move a depressed economy back towards full employment.(K vs. H 101)
I agree more with Keynes:
1) The The idea of a multiplier seems logical, since one dollar is spent more than once and can provide more than one dollar's worth of benefit (Video 2).
2) Furthermore, I believe that saving depends on more than just the interest rate. There are definitely more vague variables such as preference and need for security, a large part of Keynesian theory (Video 1).
3) Finally, I agree that government spending should help the economy NOW rather than the classical argument that the economy will 'eventually' return to equilibrium (Video 1). Clearly, Keynesian ideas serve as potential for more rapid recovery amidst recession.
I agree more with Keynes
1. A government controlled market would focus on efficient competition as well as emphasis on quality of life. (video 1)
2. It makes sense that when aggregate demand rises, we would spend more to raise GDP, which is a measure of how much money we spend. (video 1)
3. Keynes' idea of helping the economy the moment it plummets is better than waiting it out. Who knows where we'll be if we had kept waiting out the economy in the Great Depression. (video 2)
I would identify myself more with Keynes because...
1. government spending regardless of which sector of the economy will help ebb a recession (Round 1)
2. letting the economy sit there and work itself out is a poor path to take (Round 2)
3. Putting the money into action now will help direct the economy back into the right direction alot faster than just by waiting (Round 1)
Both of them have very good arguments, but I agree with Keynes more.
1)Government spending is important and the government should try to stimulate the economy. (Round 1)
2) It is not a good policy to sitting around and hoping the economy will get better without actually doing anything. (Round 2)
3) With full employment, the GDP rises regardless of what type of job it is. WW2 definitely got the US out of the depression. (Round 2)
i agree with keynes overall but also some points from hayek
1)keep y (from C I and G) growing and the economy is going to prosper (round 1)
2)Real growth means production of what people demand (round 2)
3)spending money gets the flow of the economy going (round 2)
overall, i agree with keynes
1) if the flow of money is getting low, doesn't matter the reason, we need more government spending (round 1)
2)in the long run, we'll all be dead ( round 1)
3) "The world is complex, not some circular flow. The economy is not a class you can master in college, to think otherwise is the pretense of knowledge."(round 2)
I agree with Keynes
1. That higher spending is what brings countries out of recessions, which usually happens with wars. (Video 2)
2. Waiting for recovery rather than trying to stimulate the economy is not an ideal plan (Video 1)
3. Saving money will not help the economy at all (Video 1)
I tend to agree more with Keynes.
1. Hayek proposes that the free market can cure itself if the government steps out of the way, but areas of the market where the government has stepped out of the way have generally become monopolized and corrupt (the railroad industry, the oil industry prior to the Sherman Anti-Trust Act)
2. In the Great Depression, no amount of laisez fair capitalism allowed people to begin hiring again, and the employment stayed low until both the New Deal and World War II brought Aggregate Demand up to the where it needed to be.
3. The idea that an increase in Aggregate Demand cannot alter the GDP makes no sense. If taken to the extreme and all people stopped buying anything at all, nothing would be sold, and the country would have no GDP. Therefore, Hayek's graph cannot be correct.
They both have great points but I side a little more with Hayek, but it was close.
1. I agree that government and the central bank could provide stimulus to a depressed economy and create demand for the nation’s resources that would help move a depressed economy back towards full employment. (k vs. H 101)
2. But to contradict number 1 I also agree that any attempt by the government to influence the allocation of resources through “stimulus projects” would only reduce the private sector’s ability to quickly and efficienty correct itself. (k vs. H 101)
3. To go along with number two I also agree that all a government should do was provide a few basic guidelines to allow the economy to function. (k vs. H 101)
I agree with Keynes the most
1) After the during the Great Depression his idea of boost aggregate demand was one of the reasons the Great Depression ended and America had more jobs. [Video 1]
2) Keep the circular flow moving so if the flow begins to slow down the government should spend spend more. [Video 1]
3)The war caused GDP to grow and unemployment was close to non-existent. It made the depression end sooner than later and America began to prosper. So if it weren't for WWII the depression would have lasted longer [Video 2]
Keynes!!
1. I agree with Keynes’s point made in the first video about his aggregate demand equation C+I+G+Xn because all those factors do greatly effect the demand curve.
2. In video one Keynes makes the point that savings is destruction and I agree with that because if everyone spends in the economy then the business cycle will keep moving.
3. Also in the second video, letting the economy steer itself is not a sensible thing to do, we have to do what we can to bring the economy to its maximum potential.
After watching the videos and reading the articles I identify myself more with Hayek. The points he made more reflect the people as a whole and things the government can not control.
1.Many of Keynes' policies ignore human action and motivation (Video 1). This shows that even though Keynes has a pretty good philosophy it ignores the human factor in all of this and does not address the person's role which can be changed if they show no motivation towards doing anything.
2. Also in the Video 1, "You must save to invest, don't use the printing press Or a bust will surely follow, an economy depressed" which shows that to make investments we must use the money we have saved up and not just continuously print money because this will lead to numerous problems such as the deflation of the dollar.
3.Hayek notes that spending should be used to complement consumer demand, not bolster the needs of the "central" goverment. Hayek goes on by noting how "too much is wasted" when it comes to government spending, and that the American people, the economy itself, are in control of their futures. Hayek's liberal mindset thus seems very alluring. (Second video)
I agree with Hayek more.
1) Govt influences and restrictions causes pressure within the economy; bailing out companies might make the whole economy look better, but overall, the core issue of recession continues. (Round 2)
2) Hayeks philosophy that the economy's complex interactions cannot be solved by Kayne's single minded resolution; a series of solutions that matches the problems associated with the economy must be enacted rather than a single, holistic solution. (round 2)
3) Government spending does not all go through the entirety of the economy evenly distributed. The large corporations will soak up the money, leaving the rest of the population worse than before. (Round 2)
I agree more with Keynes
(1)history is repeating itself (VIDEO I)
(2)use the government to right the economy when it is out of equilibrium and not reseting on its own.(VIDEO I)
(3) growth needs to be only a temporary state, after which we need to find better things to do than consume (VIDEO 1)
The economist that I identify myself with is Keynes.
1. Government spending would help stimulate the economy at a much quicker rate than the classical economic idea that the economy would balance itself. "We need more government spending, now it’s stimulus season" Video 1.
2. When aggregate demand rises the nation's GDP will rise. "C, I, G, all together gets to Y
Make sure the total’s growing, watch the economy fly" Video 2.
3 Keynes believed that savings led to a path of financial destruction, "Savings is destruction, that’s the paradox of thrift" Video 1.
I agree with Keynes.
1) A rise in aggregate demand can help the GDP.(Round 1)
2) We are helping the economy by spending money and not by saving it up. (Round 1).
3) Government spending can only help the economy. (Round 1)
I would agree with Keynes' points and ideas.
1. The economy could have done better if the government spend more, but that only happens during a world war. (Round 2 )
2. The advice real simple, boost aggregate demand. (Round 1)
3.Circular flow, the dough is everything, so if the flow is getting low, it doesn't matter the reason, we need more government spending. (Round 1)
I actually agree with keynes because
1. Video 2: the multiplier effect makes the most sense to me personally because, the more money you spend initially, the more of an impact will result when examining the gross domestic product.
2. Video 1: "in the long run we will all be dead"
I agree with this because, honestly, we can't wait for the invisible hand to resolve our economic issues, especially when we have technically no idea as to when or how the invisible hand will take its affect.
3. I also agree with the fact that saving is destruction. By saving, consumer expenditures will not properly will the economy's equilibrium demand and thus will decrease the economic capabilities.
Keynes
- Recession and a decline in employment correspond with a decline in output on his graph.
- Unlike Hayek, he believed that the government should be involved.
- Spending money will actually help the economy, as opposed to saving.
I agree with Keynes more:
1) By increasing the aggregate demand, the economy will grow.(Video 1)
2) As keynes said the cicular flow is everything and it has to keep going. In order to keep it moving, regardless of what the reason is, government spending is the only way to increase the flow. (Video 1)
3) I like his comparison of the economy to an engine. When the engine dies, it needs a spart to start. In an economy, wars are the sparks. When there's a war, the government spents more, and thats what's going to keep the flow going.(Video 2)
I agree with Hayek
First of all, Keynes' policies do seem to exclude a lot of the realities in life. It ignores human action and motivation. The circular flow and simple C+I+G=Y equation leave too much out. (Round 1 and 2)
Spending is not free. The government cannot spend all this money without it backfiring on them, as was the case with the housing market, the Keynesian policy caused the market to burst. (Round 2)
Keynes refers to wartime as a perfect example, but Hayek looks into the situation, saying that Keynes' own point is disproved if you analyze it more thoroughly. His question has a ring of truth, if there is full employment in war but no food, this cannot be considered a success. It is "perverse to call [war] prosperity".(Round 1 and 2)
The Keynesian economics are not helping our economy. Even in the video, when Hayek had more logic on his side and clearly beat Keynes, the refs randomly decided to call Keynes the winner. In the long run keynesian politics will most likely be dead.
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