John Maynard Keynes' Contribution to the Theories of Macroeconomics

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Macro Questions Part I Describe John Maynard Keynes' contribution to the theories of Macroeconomics. Why was he such an important economist? Discuss the theories of two other 20th century economists who made a significant contribution to the study of economics. John Maynard Keynes is one of the founding fathers of the modern economic thought. So influential was John Maynard Keynes in the middle third of the twentieth century that an entire school of modern thought bears his name Keynesian Economics (Library of Economics and Liberty, N.d.). He was a British economist who lived from1883-1946 and who developed the theory that increasing government deficits stimulate a sluggish economy, was long the guiding light of liberal economists (Skidelsky, 2008). His work primarily discredited laissez-faire economics because he was able to show that the government did and could serve a role in helping to guide the economy of a country. A supporter of Keynesian economics believes it is the government's job to smooth out the bumps in business cycles. Intervention would come in the form of government spending and tax breaks in order to stimulate the economy, and government spending cuts and tax hikes in good times, in order to curb inflation (Investopedia, N.d.). In fact, Ben Bernanke the current chairman of the federal reserve helped to build off of Keynes work with a model he refers to as New Keynesian economics, Though Bernanke is close to retirement, he would have likely been

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