Reaction of keynes and friesman Assignment Example | Topics and Well Written Essays - 250 words

Reaction of keynes and friesman - Assignment Example I think this solution is only short term as Keynes seldom considers the measures and approaches other developed countries would take to curb the effect of inflation in the United States on their markets and economies (Conerly 2012). Keynes’ position relies on jobs, interest rates, and liquidity. When an economic turmoil exacerbates, creating jobs and lowering interest rates cannot prevent a full-blown depression. Lowering interest rates to attract foreign investment can only go as low as 0%, which was the case in the United States in mid-2009 (Conerly 2012). From there, the Keynesian approach proves ineffective. On the other hand, Friedman’s position entails stabilizing the purchasing power of the private sector and collective households across the country. I agree with Friedman that the private sector plays a bigger role in stabilizing an economy than government policy during an economic crisis. In addition, the government is often unreliable when the interests of businesses are not in line with those of the government (Conerly