Keynesian school of Macroeconomic

Keynesian school of Macroeconomic thought appeals to me the most. Therefore, it is necessary to outline its of import ideas related to monetary and fiscal policy. It is important to know that this theory is based on ideas of famous British economist John Keynes and it is rooted in the 20th century. Keynesian economy claims that mixed economy is the outmatch type of managing fiscal and monetary policies, where special attention is paid to private sector and state. Keynesians doesnt believe that both state and private sector should operate on their own and, therefore, their policy differs significantly from laissez-faire(prenominal) economy. Such idea is the most appealing to me, because I think that every sector should be down the stairs thorough control. (Blinder 2003)The next moment to mention is that Keynesians believe macro-level trends atomic number 18 able to dominate over the micro-level of individual(a) behavior. In contrast to classical theory, Keynesians promote an id ea that aggregate demand for good is of great grandeur in economy and is its main driving force. Speaking about fiscal and monetary policies, Keynesians aim at raising saving in order to lower the demand for labor and products. For example, they stated that there were some ways for the government to ensure effective management of national economy.Instead of paying attention to unbalanced budgets, Keynesian theory suggests countercyclical fiscal policies, which acted against the tide of the business cycle deficit spending when a nations economy suffers from recession or when recovery is long-delayed and unemployment is persistently high. (Blinder 2003) Therefore, the government should solve short-term problems. as well Keynesians think that fiscal stimulus or deficit spending may actuate production. Rather elicit idea is that government should be complementary. And fiscal expansion is possible only in case of unstrain in labor market.However, Keynesian theory is criticized becau se of unbalanced view of monetary policy. For example, it is suggested that their approach to economy is preferably collectivist which requires centralized planning and, in such a way, it may lead to totalitarian abuses. Keynesians are more concerned with considerations instead of executing. (Blinder 2003)ReferencesBlinder, Alan. (2003). Keynesian Economics. Retrieved February 15, 2007, from http//www.econlib.org/library/Enc/KeynesianEconomics.html