a) “The long run is a misleading guide to current affairs. In the long run, we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.” is a famous quote from John M. Keynes. With this sentence, whom he was responding? And, what were his arguments against them?
a) “The long run is a misleading guide to current affairs. In the long run, we are all dead.
Economists set themselves too easy, too useless a task if in tempestuous seasons they
can only tell us that when the storm is long past the ocean is flat again.” is a famous
quote from John M. Keynes. With this sentence, whom he was responding? And, what
were his arguments against them?
b) Explain the importance of the Great Depression in development of the modern
economic thought. According to Keynes, what was the reason for the economic crisis?
What was his solution for the problem? Briefly explain his theory and give references to
the history to explain why almost all the mainstream economists embraced Keynesian
ideas at the time.
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