John Maynard Keyes
- British economist
- Governments should spend their way out of Depression
- Borrow money to be repaid after economy recovers
- Deficit financing
- Projects should be of value to the country
- Went against Adam's Smith's theories
- USA, Japan and Hitler's Germany all use this with success
Quotes"The difficulty lies not so much in developing new ideas as in escaping from old ones." -John M. Keynes
"The day is not far off when the economic problem will take the back seat where it belongs, and the arena of the heart and the head will be occupied or reoccupied, by our real problems - the problems of life and of human relations, of creation and behaviour and religion." -John M. Keynes "Most men love money and security more, and creation and construction less, as they get older." -John M. Keynes |
Summary
British economist thought that the government should spend their way out of the depression. Borrowing the money to repay the economy until fully covered. This was called deficit financing, but this went against all of Adam Smith's theories. However; USA, Japan, Hitler's Germany all used this theory with success.
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Questions?
What did Adam Smith have to offer for the Great Depression?