What is the opposite of Keynesian economics?

By Ritesh|Updated : September 1st, 2022

Keynesian economics can be contrasted with monetarist economics. It is a direct attack on Milton Friedman's Keynesian economics theory.

Keynesian theory focuses on government spending, while monetarist economics emphasizes the management of the currency in the economy.

 

Opposite of Keynesian Economics - Monetarist

  • Monetarist economics refers to Milton Friedman's frontal critique of John Maynard Keynes' Keynesian economics theory.
  • Simply expressed, the key distinction between these two schools of thought is that Keynesian economics focuses on government spending, whereas monetarist economics includes regulating money in the economy.
  • Monetarists contend that the economy's money supply should be managed while the rest of the market is left to correct itself.
  • Conversely, Keynesian economists contend that a struggling economy would continue to contract unless an intervention encourages consumers to increase their purchases of goods and services, a struggling economy would continue to contract.
  • The main goal of monetarism is to manage the money supply to manage 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.

Summary:

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.

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