What is the Opposite of Keynesian Economics?

By BYJU'S Exam Prep

Updated on: November 9th, 2023

The Opposite of Keynesian Economics is Monetarist Economics. The Keynesian economics theory of Milton Friedman is specifically attacked. Government spending is the main focus of Keynesian theory, whereas monetarist economics places more emphasis on the control of the currency in the economy.

Opposite of Keynesian Economics

Monetarist economics refers to Milton Friedman’s frontal critique of John Maynard Keynes’ Keynesian economics theory.

  • Simply put, the main difference between these two schools of thought is that while Keynesian economics emphasizes government spending, monetarist economics also includes monetary regulation.
  • According to monetarists, the money supply in the economy should be controlled while the rest of the market is allowed to correct itself.
  • The opposite is also true, according to Keynesian economists: a struggling economy would continue to contract unless an intervention encouraged consumers to increase their purchases of goods and services.
  • Monetarism’s main objective is to control the money supply in order to control the economy.
  • Keynesianism emphasizes the use of public spending to manage the economy.
  • Monetarists contend that controlling the amount of money in circulation is the best way to combat inflation.
  • Keynesians value the impact of monetarism on GDP, but it takes too long for changes in the money supply to be felt.
  • Legislators employ both economic theories to formulate their monetary and fiscal policies.


What is the Opposite of Keynesian Economics?

Monetarist economics is the opposite of Keynesian economics. The Keynesian economics hypothesis of Milton Friedman is specifically attacked. According to the Keynesian perspective, aggregate demand is not always equal to the economy’s productive capacity.

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