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In: Economics

The Great Depression shaped economic theory, social life, and people’s views of a market economy in...

The Great Depression shaped economic theory, social life, and people’s views of a market economy in general. -Explain how the Keynesian approach to guide economic public policy constituted a ‘middle way’ or ‘centrist’ approach compared to the liberals and the radicals in the USA.

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Liberals in the USA demand for the market based economic policy and economic development, where the government interference should be negligible and market forces will decide the economy, but radicals demand more monopolization and control by the government. While considering these two views, Keynesian approach brings government to come up with a discretionary fiscal policy to interfere the market where the Fed also complements government, but the government does not intend to start owning the rights of the property as demanded by the radicals. Here, the role of the government is to act as a moderators and interfere with policies as and when required, but not with the intention to destroy the soul of the market economy. A view that is held by the liberals. So, it can be said that Keynesian based policy is a centrist policy that neither destroys not follows the liberal as well as radical viewpoints.

Rahul Sunny answered 2 years ago
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