Game of Theories: The Keynesians
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- เผยแพร่เมื่อ 6 พ.ย. 2017
- When the economy is going through a recession, what should be done to ease the pain? And why do recessions happen in the first place? We’ll take a look at one of four major economic theories to find possible answers - and show why no theory provides a silver bullet.
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This Channel is pure gold
The gold standard?
More valuable than pure gold I think.
This channel is pure fiat
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Free pure gold
This channel is amazing. Thank you, thank you, thank you.
The quizzes are exactly what I need to test my understanding. 🙏🏻
Best explanation on Keynesian economics I have ever watched!
I don’t think critics of Keynes understand his idea.
Keynes was writing at a time of extreme economic difficulty. After he died other economists hijaked his theory and tried to apply to situations in which conditions were different.
Keynes believed that if planned savings is less than investment, the result is contraction. This describes the economy at the tine he was writing, and I believe post 2008. And probably post Covid-19 crisis.
It is in these circumstances that he believed in fiscal stimulus.
A Keynesian economist called Hyman Minsky explained why aggregate demand can be too low - Minsky moments occurred post 1929 and post 2008.
The situation in the 1970s was entirely different - not a period of weak demand, so Keynesian economics was never going to work. Critics site this as a reason to discredit Keynes, without understanding this point.
Minsky said debt is the means by which economies grow. But too much debt leads to bubbles.
Governments, by contrast, can borrow instead, or even print money. If planned savings exceed investment there are three ways to correct this: via consumer borrowing, via government spending, or by a deep recession. That was Keynes’ true insight.
His model is extremely good for handling crisis situations in a non elastic short term wage market. This is largely true except that as gig based jobs are taking a higher % of the economy the elasticity of the salary increases
Keynes's whole theory was based on a false understanding of Says Law. Aggregrate supply=Aggregrate demand. There is no such thing as being too much or not enough aggregrate demand. Supply and demand are always equal in the aggregrate. The more you supply the more you can demand, this a pretty simple concept which cannot be refuted.
Ross Aggregate supply equals aggregate demand by definition. But Keynes was talking about planned savings, it is the word ‘planned’ that is key which means his theory is not contradicted by Says Law. And these last twenty years there has been a global savings glut (Bernanke)
@@techopialimited1453 Savings are real capital i.e.... factories, tools, roads. It is impossible to have too much savings (i.e. capital) this is how wealth is accumulated. You can have too much money and credit chasing real resources, which is why increasing aggregate demand by increasing the supply of money will have no effect other than driving up the prices of real assets and misallocating resources.
The only way for an economy to grow wealthier is to divert more resources to capital investment and less to consumption. To destroy wealth is to save less and consume more. The same concept as any individuals finances.
Best explanation of Keynesian economics that I've seen!
Marvelous Palpable Explanation with Resplendent Graphics 🙌👏👌. Looking forward to get next videos soon😋.
great video,very easy to understand !thank you
A very didactical video. I'm glad of having stumbled upon this channel.
You're the best! Thanks for such a great content.
Thank you. I enjoy your channel
Why this channel does not have more subscribers? Its very very good
Não esperava encontrar um corintiano aqui....
Keynesian economics is a good starting point but has many flaws and modern economic theory has since evolved. But having surpluses in the good years and only deficits in the bad ones is a good idea that should be retained. It's sad however that almost no government does it. And when the economy gets really bad like it did for the UK after 2008, because they didn't save up, they still had to do austerity otherwise it would've spiraled into a debt crisis.
I have my exam in three days and ... I regret to have not found this earlier before.. Sucks to be me, now I have to watch this video like five times per day haha
That fiscal crisis idea sounds scary. Is ever increasing debt sustainable? I don't see the U.S. reducing its debt anytime soon.
The US hasn't been Keynesian since the 70's
It turns out to be even worse if the country is not capable of paying it 😂
Increasing debt is sustainable and profitable as long as the country's growth rate is higher than the interest rate.
Thank you for this! Wish I started out with these videos as opposed to getting lost in textbook ramblings.
Very very good videos.
Excellent video
Brilliant!!⛳
Great!
Awesome, when is the next video?
Next Tuesday! The Monetarists!
-Roman
love this
Seems odd to assume that government expenditure would stay proportionate to aggregate demand, when that is clearly not the case. It seems like wages, government expenditure is also sticky.
Well the Keynesian theory has very much developed since then in Post-Keynesianism
What I love about Keynesian economics is no matter how many times the real world proves it to be wrong, it continues. I wish I could have that determination.
When do you improve Runcorn?
Monetarism is a branch of Keynesian economics not a separate school.
NICE
If only Keynes had remembered what Winston Churchill had warned about the destructive impact of monopolies and monopoly privilege. In 1909, campaigning for a seat in the House of Commons Churchill told the British people that monopoly was the inherited enemy of democracy and of justice. He added that the monopoly of land is "the mother of all monopolies." Churchill's solution echoed the teachings of the Scot political economist Patrick Edward Dove. Government should impose an annual tax on those who control land equal to the potential annual rental value of whatever land is held. Keynes somehow managed to ignored the growing redistribution of wealth associated with the concentrated control over land (broadly defined). Land blessed with natural resources to exploit was climbing in value. The same pattern was occurring in the cities where commerce occurred and population was increasing.
It easy to understand this video than the explanation in google
Keynes met once with FDR and he said he was a nice enough guy but he did not know much about economics.
There is this common mistake that even professional economists make.
G is not government spending. G is government expenditure. When we say, government spending it also includes transfers which is not a part of G, rather a part of C in the form of Personal Disposable Income.
So please mend it.
th true visual llearning
Your keynesian models are tidy and neat but that top-down approach is a fatal conceit.
@Reaps51 what do you guys think about Jeffrey Sachs? He wrote a book with Bernie Sanders and is a top economics professor at Columbia University
@@elmerovero7528 You lost me at Bernie Sanders. Sounds like another dipshit socialist to me.
@@elmerovero7528 Jeffrey Sachs is a real economist but not a respected ones. Comparing his works to a real respected mainstream economist like Thomas Piketty, Jeffrey seems to have some kind of political bias driving his work. For me, I would not have him on my list of economist to listen to.
@@challism Glad youre on an economic channel, maybe you'll figure out what "socialism" is
@@elmerovero7528 Jeffrey Sachs is a Globalist.
Back and to the left... Back and to the left... Back and to the left... Back and to the left... Back and to the left...
3. According to Keynesian business cycle theory, if consumption and investment fall, what will happen to government spending? *
a. It will fall.
b. It will stay the same.
c. It will rise.
anyone have explanation?
It must rise.
Aren't wages sticky merely because of minimum wage laws and other labour laws ?
No, but it is the bulk of their stickiness.
He did mention it in the video as one of the factors
I love how Real Business Cycle is represented by a literal god... Some bias at play here?
its a play on the word "shock" as in "supply shock" since zeus is the god of lightning and all
Keynesianism kills saving which is the driver of economic growth. Keynesianism is like trying to grow wealth by dividing it
I think you misrepresent Keynsians in saying they believe "wages are sticky" wages are elastic, just not perfectly elastic, in a Keynsian model, when Aggregate demand drops wages spending drops and so general demand for labour drops, a combination of wage cuts and unemployment occurs, the reason the market doesnt clear is because, unlike a good, (such as bread) when the price drops supply doesnt really drop accodingly, there are still all thesre working age people about without jobs, they don't disappear, labour supply is very inelastic.
I think you are talking about neo-keynesian economics.
Mandelbrot Set Right!
The Great Recession was caused by greed. The problem is economists appear to forget economics is a social science. The economy had ways for greed to be exercised by customers purchasing houses they cause not afford, the banking system from commercial banks to Hedge Funds to pack derivatives which were failed attempts to diversify risk.
Greed is good
@@libertardsbeware4180 how?
There are many things to not like about Keynesian economics
But what I really don't like much about them is they tend to ignore importance of monetary policy a lot because of Fiscal policy.
Little uncharitable, but good overall.
The 1% are the winners Pendejo.
The 99%, not so much.
That tounge dough..
it interests me just how many of these economic problems can be fixed by just paying people more money. workers are your consumers the higher their base pay the more they spend and the more companies make. Corporate greed prevents money from moving to do the social ladder undercutting their consumer's paying power. trying wags to inflation also helps prevent inflation increase on over all because corp greed can not push things too hard or there going to pay out more of what they make.
And/or lower taxes
God this even worse not the whole paying shit but corporates are evil wah
First
NUSME sure, why not?
i dont get rational connection of up and bottom parts of your chart.
you should not generalize a strand of theories without representing ur excuse.
I don't understand why the title is play on game of thrones if the video is gonna have absolutely no reference to game of thrones whatsoever.
This is pure Bullshit. Keynesian economics didn't come in to play until after the Depression started. Conservative economics brought a great boom in the roaring twenties, but as always, that great boom lead to a major crash. The conservative policies of Harding, Coolidge, and Hoover, brought about the Great Depression. The Keynesian policy of FDR got us out of it. In the same exact way, the conservative policies of Dubya caused the Great Recession of 2008, the Keynesian policy of Obama prevented a 2nd Great Depression and started us on a slow but steady climb back to economic health. Look at history, people. Don't just believe crap because it sounds good, or it's easy to put on a bumper-sticker, or because Adam Smith said so. Free market forces are good for sure, but they aren't the only way to a stable economy. Why can't you people learn from history?
Nope. The housing market crash of 08 was because the Federal reserve artificially lowered interest rates allowing more easily for business malinvestment and consumers were able to purchase homes they couldn't afford. Money manipulation was precisely the cause of such a tragedy,not its savior.
Agreed, Coolidge was hands off but how is Hoover "conservative"?
Almost every FDR program had origins in Hoover's interventions. FDR dialed Hoover's programs from 9 to 10.
In any case, the Great Depression was a severe monetary contraction from the Federal Reserve and it's not clear how FDR helped. Heck, he prolonged it.
I wonder why you claim Free Market forces "need to be stabilised" or "are good but need to be controlled" but will stop at nothing short of an absolute free market when it comes to people choosing sexual partners and gender.
I am not claiming that it should not be a free market but what is it about trade, which is the very extension of self ownership, that you so desire to control?
The Fed caused the depression by causing massive deflation.
Keynesian == your hard earned money is gone. You're welcome
Neoliberalism= low quality public services banks doing whatever they want massive recessions your hard earned money is gone. Your welcome.
Lol the level of strawmanning in this comment section
Study the Business Cycle Theory. You're welcome.
Keynesian Medicine: If you're poisoned from drinking poison the solution is drink even more poison until you're not poisoned anymore...(these guys are geniuses)