Capstone Assignment Economics - History of Economic Thought - Topic 2
Keynes versus the classics: the role of money in an economy.
The effectiveness of economic policy is one of the most heated debates in macroeconomics. This is so because of the fundamental different views between schools of thought on institutions, on rationality and human behavior and on the problem solving capabilities of the private sector and the government sector. Is equilibrium the norm or is disequilibrium the norm?
For this capstone we focus on monetary policy and in particular on the viewpoints of Keynes and the monetarists. Behind the controversy is a different theory on the role and the use of money in an economy. This capstone aims to analyse these theoretical differences and apply these to the role and the effectiveness of monetary policy.