Philosophy of Economic Thought Essay Example | Topics and Well Written Essays - 1250 words

Philosophy of Economic Thought - Essay ExampleIn spite of the fact that many of them had already dabbled into the interpretation of Keyness gunpoint of view, two of those whose analysis are worthy of being examined are Paul Davidson and Axel Leijonhufvud. The critics of Keynes believe that the main contributions made by Keynesians and post-Keynes theorists to economical theory are each(prenominal) negative, set forthicularly as they seems to attack the conventional way of interpreting situations. For many of this critics, the saddest dimension that there is to it is that Keynes theorists, besides dumping the traditional ways of perceiving situations, is that they do not offer an alternative through which the anguish experienced by people in their daily life can be reduced. Paul Davidson does not match at all with all what this critics opine. He believes that such positions are assumed by classical economists who find it almost impossible to align themselves with the change that i s offered by Keynes (Davidson1994). The approach adopted by Davidson shows how Keyness General Theory is relevant to people in the globalised world in which we now live. (This actually is to annul the premiss by roughly individuals that Keyness General Theory is no longer relevant in this time and age). ... Leijonhufvud believes that the stand of Keynesian economists was overhyped. Unlike the paradise that some had conceived from it, the truth is that Keyness General Theory has many loopholes which were yet to be revealed. As with many other theories, whose foundations were not solidly founded, a wave of beefed-up desire for change will sweep it into nonexistence. Leijonhufvud was one of the first few economists to present the new viewpoint which opines that typical Keynesian theory needed a major re-education or a new drive to ensure that they know what they should really stand for. Leijonhufvud, for example, posits that the theory of markets fundamental IS-LM was lethally defec tive and should be substituted. To back up his point, he cites Keynesians reliance on inflexible wages. Patinkin (1948) proves that there are always some supposed levels of prices and wages which are low full to engender a full employment level of cumulative demand. This is clearly in antagonism to the Keynesian position that insists unintended unemployment can be association to the prevention of wage or price rate from dropping to a hypothetical or supposed level. It is quite ironic that Keynes who lived a huge part of his life as an open market analyst is the one who has developed theories whose major application is in closed economies (Keynes 1936). One of the points that Keynes may have cute to prove is that even if one is inattentive to international trade and its impediments, a closed economy did not hold any regular market instrument that assured a full-employment symmetry (Keynes 1936 p. 120). Davidson (1994) also has this to say Any deliberate policy that aims to make a nations industries more