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The conclusive fault line in Keynesian economics

In: What’s Wrong with Keynesian Economic Theory?

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  • Peter Smith

Abstract

The key to unequivocally undoing Keynesian economics is via the price system. Aggregation leads Keynesian economics down the flawed path of giving primacy to demand instead of to production. In turn, this shifts its focus away from the role of prices in determining the makeup of production and in guiding the economy out of trouble. The damage stimulus expenditure – the epitome of Keynesian policy – inevitably and conclusively does in retarding recovery, by interfering with price signals, is thus buried out of sight.

Suggested Citation

  • Peter Smith, 2016. "The conclusive fault line in Keynesian economics," Chapters, in: Steven Kates (ed.), What’s Wrong with Keynesian Economic Theory?, chapter 13, pages 235-250, Edward Elgar Publishing.
    • Handle: RePEc:elg:eechap:16893_13
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    Keywords

    Economics and Finance;

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