The Keynesian Theory and the Theory of Cycle of Money
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| Pages: | 3 : 8 |
| Abstract: |
The Keynesian theory aims at issues that authorities are able to interact with the economy, to face crises and to administrate dysfunctions on the economy. The Keynesian theory uses the demand side effect and not the supply side effect on the economy. The government and the authorities provide financial liquidity solutions. But, the basic issue that authorities try to solve in that case is the inflation effect. Therefore, for this reason, is preferred by certain authorities the supply side effect economic solutions. Thence, according to the theory of cycle of money is plausible to proceed to with a different approach as there the authorities can use the supply side or the demand side according to their willingness. The theory of cycle of money can include any theory to its application, as maximizes the utility in any economic view making to each case the appropriate adjustments. The choice of policies is subject to the special needs and circumstances of the bank system, and of governments. In this paper is given an overall view of the Keynesian theory and of the theory of cycle of money. This study is about the way that the Keynesian approach could be included in the theory of the cycle of money. |
| JEL classification: | B41, F40, F43, F62 |
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