reply to post 150 words
I believe that both Classical and Keynesian economist sides seem to have merit. I always seem to find myself looking at both sides and playing “devils advocate”. I would say though after much research that I find myself definitely leading more towards that of a Keynesian economist. Keynesian theory seems more reliable to me because I believe that people’s decisions tend to be less rational than driven by popular sentiment. The stock market crashes of the past and present seem to be evidence of this. A popular saying is that “fear and greed control the stock market”. I also believe that in times of recession, in order to prevent us from being there long term, the government has to step in in order to pull us out of that recession. I believe that the free-market if left alone could end up staying there a lot longer while people remain out of jobs. In a recession there is less demand for goods and services which leads to unemployment. Unemployment leads to less consumption and which means savings (for things such as a car or house)is put on the back burner. I also would like to believe that free markets will always eventually yield the result of eliminating the least efficient and innovative players (regardless of government intervention) but history seems to show otherwise. I think that a great blow to Classical Economics was delivered in 2009. It is difficult to imagine what may have happened had the government not stepped in to save the banks, auto industry, financial institutions and insurers. The threat of a systemic failure was undeniably real and could of happened. So for these reasons, this is why I would I choose to relate to Keynesian economist.