1. Keynesian Economics: Relevance in
Current Economic Crisis
Parveen Gill
43rd Annual Conference
Canadian Economic Association
May 29-31, 2009
University of Toronto, Canada
2. Why this topic?
! Different versions of Keynesian economics
! Impact of Globalization on the countries
from where it originated
! The question of fixing the problem or
sustainability
! The Asian economic boom
4. This Paper
! Introduction
"Components of Keynesian Economics
"Applicability to the Current Economic Situation
! The Great Depression and Current Financial
Crisis
! Geographical Unevenness
"The Asian Phenomenon
! Global Linkages
"Redefined Role of the Government
! Conclusion and Recommendations
5. Components of Keynesian Economics
! Free Market Vs. Government Intervention
! Government Intervention
"Fiscal Monetary Mix
"Continuous Process
"Question of Sustainability
! The Circular Flow of Income and
Employment
"Job Creation
"Production, Distribution, and Consumption
6. Application to Current Economic Crisis
! Markets are not self correcting
! Public works: not sufficient enough to
revive the market
! Persistent intervention of the Government
7. The Great Depression and Current
Financial Crisis
! Comparisons are misleading
"Stock and real estate bubble
"Financial institutions and transparency
"Regulations-not proactive
"1930s market capitalism and socialism
"Money supply restrictions
"U.S. Debt
"Response to policy measures
8. Equitable Global Economy:
The Asian Phenomenon
! Uruguay Round
! Deregulation of developing nations
"1997 financial crisis
! Less affected developing economies
"Strong Government intervention
! Interest Game: buy at low and swap at high-yield
"Need for a more stable benchmark currency
! Asian Economies comparatively stable and self
reliant
9. Redefined Role of the Government
! Tech age and global linkages
"People, products, and technology
! Economic growth of China and India
"If immigrants decide to go back?
"Purchasing power of the developed nations
"Circular Flow of income and employment
