ps14710 - Keynesianism • Two assertions for development...

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o 20 TH  CENTURY EXPLANATIONS (2:01:52 recording) Stateism Definition o Economic system where there is a role for the state Stateism’s view on liberal economics o There is no true belief of a free market without state intervention o Two conditions of Liberal Economics for the market to function  effectively 1. No barriers to entry ensures no monopoly 2. All firms must be price takers must take prices of laws of supply and demand o State enforces these conditions understanding there is market failure (and government failures) Market Failures the market unregulated cannot provide consumers with  everything that is necessary for well being they promote well being
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Unformatted text preview: Keynesianism • Two assertions for development economics o 1. Economic cycle, recessions are cyclical o 2. When period of recession, owners of capital will not want to invest the capital they have insecurities deters investment • Proposes State Intervention with Capital and Reducing Interest Rates o Capital Investment Promotes Labor o Reduce Interest Rates Money Supply Increases Promotes Investment • In the Third World Paradigm o People don’t have capital do let the state invest into modern industry State acts as a proxy for lack of investors • Keynesianism is a precursor to modernization...
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ps14710 - Keynesianism • Two assertions for development...

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