Macroeconomics Essay Example | Topics and Well Written Essays - 500 words

Macroeconomics - Essay ExampleAccording to Hayek, the price machine of the free trade serves to convey information about supply and demand that is dispersed among many consumers and producers and which cannot be assembled or coordinated efficiently in any other way. And seriously doubts whether a socialistic economy is capable of solving the problems of rational allocation of its resources (Hayek, 1982). Keynes on the other hand favored presidential term intervention through its fiscal and monetary policy to assuage the impact of recession and depression or financial crisis like the one United States recently had in 2009. Keynes believe that it is not only the market that can make an economy work at a maximum strength but much(prenominal) can also be raised to the that level by the intervention of the government. In contrast to Hayek, Keynes advocated collectivism through international coordination of fiscal and monetary stimulus to deflect and mitigate any downturn in economi c cycle. He is also the sponsor of deficit spending to lift an economy from depression in contrast to Hayeks proposal that it solely market the (free) market that can achieve utmost efficiency in an economy.