Keynesian Dominance in Crisis Therapy

Kristina Spantig
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Kristina Spantig: Graduate Programme "Global Financial Markets"

No 45-2013, Global Financial Markets Working Paper Series from Friedrich-Schiller-University Jena

Abstract: This paper scrutinizes the debate of Keynes and Hayek concerning the adequate re- sponse to economic crises from a historical perspective. In a first step the develop- ment of the Keynesian economic theory, its ascent during the Great Depression and its use during financially sound times is analyzed. In a second step the Hayekian cri- tique to discretionary government intervention and its long run consequences is scru- tinized. In the last step it is analyzed why, in the wake of a crisis, short-run oriented Keynesian therapy dominates long-run Hayekian therapy as in the most recent crisis.

Keywords: Keynes; discretionary fiscal policy; monetary policy (search for similar items in EconPapers)
JEL-codes: B20 E12 E52 E62 (search for similar items in EconPapers)
Date: 2013-08-22
New Economics Papers: this item is included in nep-his, nep-hpe, nep-mac and nep-pke
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Persistent link: https://EconPapers.repec.org/RePEc:hlj:hljwrp:45-2013

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