But economist Milton Friedman of the University of Chicago continues to fight a lonely battle against what has become the Keynesian orthodoxy. The tools Keynes suggested have won widespread acceptance among governments all over the world the application of expansionary fiscal policy in the United States appears to have been a spectacular success. Most economists believe that Keynes’s ideas best explain fluctuations in economic activity. He is confident that he has found the key not only to understanding the Great Depression but also to correcting it. In Britain, Cambridge University economist John Maynard Keynes is struggling with ideas that he thinks will stand the conventional wisdom on its head. The old ideas of macroeconomics do not seem to work, and it is not clear what new ideas should replace them. The collapse seems to defy the logic of the dominant economic view-that economies should be able to reach full employment through a process of self-correction. Forecasts that prosperity lies just around the corner take on a hollow ring.
Many people have begun to wonder if the United States will ever escape the Great Depression’s cruel grip. I would have also like to a see a timeline with the evolution of economics.Chapter 17: A Brief History of Macroeconomic Thought and Policy Start Up: Three Revolutions in Macroeconomic Thought I felt that there were many places where the judicious addition of visual material would have added a lot to the understanding. Since I read an ARC, there were no graphs or charts. I think I learnt more about macroeconomics from this book than I did from the texts I used in college. We get a good exposure to economics without getting too caught up in the details. ‘A Little History of Economics’ is enthralling and is a rollicking read. This is a book that focuses on the developing world too, in addition to the West (which most economics books focus on). This refrain, along with his focus on people, ensures that we get to see how policies affect the populace across the world.
The author, an economist, knows of the common impression that economists are considered out of touch of reality. The underlying refrain throughout the book is to keep a cool head but have a warm heart (a quote by Alfred Marshall). It is in fact similar to a historical fiction (almost a thriller of sorts). Even though this sounds like an economics textbook, it is not. During this journey, we get to learn about capitalism, communism, microeconomics, macroeconomics, Keynesian theories and Friedman’s rebuttal.ĭon’t get me wrong. We get to meet all the famous names in economics like Adam Smith, Karl Marx, John Nash, Amartya Sen amongst others.
The book was published on IntroductionĪ Little History of Economics is a fast-paced, rollicking ride into the evolution of economics from the Grecian city states to behavioural and development economics that exists today.
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