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 rendering of Keyness point of view, two of those whose analysis argon worthy of being examined are Paul Davidson and Axel Leijonhufvud. The critics of Keynes debate that the main contributions made by Keynesians and post-Keynes theorists to economical surmise are all told negative, particularly as they seems to flak catcher 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 slipway of perceiving situations, is that they do not offer an alternative through which the anguish experienced by wad in their daily life can be reduced. Paul Davidson does not agree at all with all what this critics opine. He believes that such positions are assumed by classical economists who find it almost impossible to correct themselves with the change that is offe red 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 assumption by some individuals that Keyness General Theory is no longer relevant in this time and age). ... Leijonhufvud believes that the stand of Keynesian economists was overhyped. remote 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 strong desire for change lead sweep it into n geniusxistence. 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 defective 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 enough to engender a full employment level of cumulative demand. This is clearly in antagonism to the Keynesian position that insists unintended unemployment can be link 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 wanted to prove is that even if one is inattentive to international trade and its impediments, a closed economy did not hold any firm market apparatus that assured a full-employment symmetry (Keynes 1936 p. 120). Davidson (1994) also has this to say Any deliberate constitution that aims to make a nations industries more