Question

are you classical or Keynesian economist? pick a prespwctive and defend

Answer 1

I am a Keynesian Economist. Below are the reasons for my stand:

1.

Classical Economist believes that government intervention is not required if the economy is suffering from recession or depression. However, I believe that the Government plays a crucial role in order to alleviate the situation by providing stimulus packages to the needy ones. This is happening in the current COVID-19 scenario, where the government is intervening and helps to correct the markets

2.

I believe that the Markets are imperfect and need government or Central Bank support to balance out the Demand and supply factors. However, the Classicals simply assume that the markets are perfect which is unrealistic

3.

I also believe that there are wage rigidities in the short run as it takes time for the workers to adjust their wages according to the rising prices. This leads to short-run unemployment. On the other hand, Classicals believe that unemployment will automatically bring back to it natural level. Given the constraints like wage rigidity, making such assumptions are unrealistic.

4.

I reckon that the economy can be at an equilibrium that is not at full employment due to the presence of economic constraints. However, Classicals believe that the economy is always at a full-employment equilibrium in the long run. It is not realistic and does not apply in the current world

Because of the above reasons, I believe that Keynesian Economics provides much more deeper insights into the economy and relaxes the unrealistic assumptions that the Classical Regime makes.

**if you liked the answer, then please upvote. Would be motivating for me. Thanks.