Review of John Hicks' Article 'a Suggested Interpretation of Keynes'

Any firm’s production function relates to its marginal product of labour. The production function is used to explain the relationship between the quantity of the inputs used in the production process, and the firm’s production capacity in relation to other factors of production such as labour and capital. The marginal product of labour is the increase in the amount of output from an increase in unit labour supply. Therefore, the production function is given by Q=f (L, K).

If depreciation were simply ignored, would this affect the acceptability of proposed capital projects? Explain.

In order to discuss the statement in the title, I will first talk about J. M. Keynes and give some general information regarding his life and career. Following I will discuss about Keynes criticism of Say’s Law starting with Aggregate Demand and how consumption together with investment are in relation to income. Afterwards I will highlight the role of investment and what the policy implications are. For the final part of this essay I will conclude with some evidence to support the claims made.

During the time of war Keynes ideas were more successful because the government was able to make a large quantity of jobs for people through goods needed for the war. Since Keynes ideas were so widely used and accepted at this time, Hayek’s ideas were rejected and considered bad because the purposed to do the opposite. After the “good 30 years” Keynes economic ideas began to show flaws through inflation and unemployment rates. This issue resulted from the restriction

In “Unsolved Theoretical Questions”, Galbraith suggests the current and past debates about the concept of the NAIRU, and then raises several concerns about the validity and usefulness of the natural rate. The idea of the natural rate was invented by Milton Friedman (1968) and Edmund Phelps (1968). Specifically, it was Friedman’s presidential lecture that

Keynes’ theory suggests that individuals will not necessarily demand what is produced, therefore firms must produce what consumers demand rather than simply expanding production (increasing supply, which previously was assumed to increase aggregate demand). Thus, the level of economic activity, or total output (O) was determined by the total expenditure (E) within an economy. The amount spent by firms, individuals, the government and foreigners is determined by their level of income (Y), which is determined by their level of production (O). Therefore, Keynes proposed that the equilibrium level of income, where there is no tendency to change occurs when:

I like how you mentioned the time frame Keynes wrote his ideas during the great depression. My pappy was born at the beginning of the great depression. He was apart of a farming family. Farmers of this time were basically living like they were apart of a traditional economy. The funny thing is they were considered some of the richest people during that time frame. My pappy told me a story a little while ago, about how his aunt would take in hobo's and give them work and a meal and a place to stay ( the barn). As long as they were willing to work she was willing to provide. This kind of proves that in order to have a good economy you can't have the extremes in any economic system. Some traditional economy principles should be intertwined into

The author surveys three influential economists of the Classical era—Ricardo, Marx, and John Stuart Mill—and introduces the reader to their Macroeconomic perspectives based on some of their more prominent Macroeconomic theories.

Economics is based primarily on the ideas of two important figures; Adam Smith and Karl Marx. The two individuals; each with their distinctively different ideas on the “ideal” economy have inspired and allowed other individuals such as John Maynard Keynes and Milton Friedman to craft their own economic concepts as well as enhance previous ones. However, many differences in economic theories arise between the grandfathers of economics and two of the most important theorists of the 20th century.

John Maynard Keynes is one of the most influential figures of the twentieth century yet one who is over looked. He was a political economist of extraordinary optimism and vision who believed that governments have the power to solve some the greatest economic issues. He didn’t believe in communism or in the free market he believed in a middle grown where increased monetary policy actions by the central bank and fiscal policy actions by the government, can actually help stabilize the economy and smooth out the peaks and troughs of which all economies are prone too. Keynes believed what held back countries was corruption, knee jerk policies and short slightness, but if they were the overcome these three ills then we could look forward to an age

New Ideas From Dead Economics, written by Todd G. Buchholz, introduces different economic ideas from great economists throughout history. The book starts with the basic introduction of economists, and then points out the issue in the past of the ignorance of the economists. From his insightful perspective, Todd G. Buchholz illustrated the theories of the great economic thinkers in history and developed the modern economic thought based on those theories. Adam Smith’s “invisible hand” and “division of labors”, Alfred Marshall’s “economic time” and “elasticity model”, and John Maynard Keynes’s “Keynesian thoughts” are the five most intriguing ideas presented in the book that contributes to the modern economics.

Keynes sought to answer these questions and inform the general public, as well as influence policy in governments. Someone familiar with the study of economics cannot think “Keynes” without also thinking “Hayek”. F.A. Hayek was another economist during Keynes’ time, and Keynes used Hayek’s work, as well as the work of other “classical economists”, to be able to refute laissez-faire economics.

Throughout the video, Keynes and the Great Depression, the idea that investment and consumption can be declining simultaneously was highlighted immensely. This means that the total private demand for consumption goods and investment goods, might be insufficient to sustain a economy that reflects full employment. Keynes brought into question the idea that full employment could not be achieved through the sufficient lowering of wages. This is due to the idea that economies are composed of aggregate quantities of output, which are a result of aggregate streams of expenditure, essentially people are not spending enough money causing unemployment. Although, Keynes presents the idea that it is possible to reach full employment, if public demand from

‘Keynes’s analysis in Chapter 12 of the General Theory of Employment, Interest and Money suggests that capitalism is inherently unstable due to its financial structure’.

The classical theory assumed the prevalence of full employment. The ‘Great Depression’ of 1929 to 1934, engulfing the entire world in widespread unemployment, low output and low national income, for about five years, upset the classical theorists. This gives rise to