Do you think today Keynes' economics can play any significant role?? Why?

Question

I mean what's the importance of Keynes' economics not only to the modern economies, but also to the politics.

Answer 1

awesome question! Keyene's looks at two buyers in our economy, the Govt and consumers. His basic concept is 'the buyers' determine market prices NOT sellers (Neo-Classical).
I spoke with Dr. Kurth at McNeese State University (Economist for state of La as well). His concern is we are mixing and matching elements of economic models. Keyene's with Classical and Monaterists .Keyenes uses either raise/lower taxes or raise/lower interest rates as one way to speed/slow the economy. People are glued to radio when Bernanke says raise taxes. Less money spent, means less money buying products and it's slows down the GDP. But you run into the Monertarists, who care neither about sellers or buyers, but rather about the 'total amount of moeny in circulation' and want to reduce or add money to the economy to speed/slow. Increasing Bank required holdings is one way to slow money down. There's such a thing on the secondary market as bonds, US buys and sells bonds to other Nations who have some US Debt. Anyway, back to your question, Keyene's is still popular because it uses a metaphoric brake of either taxes or interest or Govt spending to bring the economy back into focus. Neo Classical model says simply leave the market alone, it will fix its self....self correcting. The Great Depression showed what happens when the economy was left alone without any help. So, now we have a mixed economy where the Govt inconcert with the above mentioned 'brakes' influences the speed of our economy. These keep the economy from having highs/lows...more moderate controls are in-place.

Answer 2

His short-run aggregate theory is still relatively valid today. The problem with his thinking of "run deficits during recessions, pay it off during the boom" is that politicians love to run deficits during recessions, but none of them want to pay the money back during the boom.