Question

Differences Between Classical & Keynesian Economics

Answer 1

Many eminent Economists have contributed many economic ideas which are used to regulate and frame the polices for social benefits for all the countries. Such ideas are rendered by the different economists at different time period. Likewise Classical and Keynesian Economic ideas are framed by economists at varied period. Let us discuss the differences between those two ideas briefly.

Classical Economics has its origin from the period of 18th century and 19th century. It propagates actually the doctrine of feature of the economics having the good situation of real GDP with the good development in the economic variables like wage, price level and interest rate, etc. While Keynesian economics propagates the important activity of influencing the more aggregate demand which acts as a powerful indicator of sound economic development with more output of goods and services.  

Classical Economics insists to regulate the economy of the nation without government intervention. It actually called as the laissez-faire policy. While Keynesian economics refers to the process of government to spend on social welfare activities. It also supports its stand of government to spend on many investments of social and nation building activities.

Classical Economics prefers for the balanced budget spending without to experience the effects of government debt. While Keynesian economics prefers government borrowing as the decision to regulate and stimulates more government spending.