Discussion Questions......Are you a Keynes or Hayek Economist?
Questions for Video 1
1. Who do the bartenders "Ben" and "Tim" represent in the video? Why are they pouring liquor? What does the liquor represent? (Hint: Animal Spirits)
Bartenders "Ben" and "Tim" represent appointed government officials in the video. Ben represents Ben Bernanke, Chairman of the Federal Reserve, and Tim represents Tim Geithner, President of the Federal Reserve Bank. The liquor represents the monetary dollar that is being dispensed into the economy. They are pouring liquor because they are signifying what the Federal Reserve organizes by increasing the quantity of credit that is being used in order to get the economy stimulated. 2. The chorus of the rap has Keynes saying "I want to control markets" and Hayek saying "I want to set [markets] free." Is either of those positions right or wrong in all circumstances? Under what circumstances is more government intervention in markets warranted, and under what circumstances should the government stay out as much as possible?
The positions are not always right or wrong in all circumstances. Each position is suitable for the given circumstance. If the economy is not able to get itself out of recessionary gap within a certain amount of time, then government interference is needed to help stimulate the economy by increasing government consumptions. When the economy is in a deep recessionary gap, then government interference in markets is necessary. I do think that if an economy is prospering well on its own, the government should back off until they are needed.
Questions for Video two:
1. What are the critiques that Keynes offers of Hayek? What are the criticisms that Hayek proposes about Keynes? Does one side seem to have a much stronger argument than the other, or do they both suggest that the theory's view of the world is still incomplete?
The critiques that Keynes offers Hayek are that spending evens out the economy, that...
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