Economic Theories Smith Keynes and Hayek Adam Smith

Economic Theories Smith, Keynes and Hayek

�Adam Smith (1723 -1790) �Scottish political economist and moral philosopher �Father of economics �Wrote The Wealth of Nations �People behave in ways that satisfy their own self-interest �An “invisible hand” guides the market place

�John Maynard Keynes (1883 -1946) �British academic and government economist �Introduced the idea of using government action to stimulate aggregate demand �Wrote “The General Theory of Employment, Interest and Money” which marked the beginning of the field of macroeconomics �GOVERNMENT INVOLVEMENT

�Friederich von Hayek (1899 -1992) �Austrian-British economist and political philosopher �Considered to be one of the 21 st century’s most important economists and philosophers �Argued for the classical economic view: less government and more freedom in the marketplace �LAISSEZ FAIRE (French, “let do” or let it be, leave it alone)

�In Fear the Boom and Bust, two famous economists from the Great Depression years - John Maynard Keynes and F. A. Hayek - come back to life to attend an economics conference on the current economic crisis. Before the conference begins, and at the insistence of Keynes, they go out for a night on the town and rap about why there's a "boom and bust" cycle in modern economies and good reason to fear it.

�http: //network. nationalpost. com/np/blogs/fullcomm ent/archive/2010/01/29/fear-the-boom-and-bust-lyrics -waiting-for-recovery-seriously-that-soutrageous. aspx