Nicholas Wapshott: The Economics of Keynes (4/5)

The video discusses John Maynard Keynes' revolutionary ideas that challenged classical economics in the 1930s, leading to the development of macroeconomics. Keynes' approach emphasized understanding the entire economic system rather than focusing solely on individual parts. Despite his disinterest in econometrics, his ideas laid the groundwork for modern economic modeling. The video also highlights Keynes' belief in the importance of distinguishing between constants and variables in economic models and the scarcity of wisdom and judgment in academia. Finally, it covers the application and misapplication of Keynesian policies from 1945 to 1975, noting the challenges posed by the misalignment of business and electoral cycles.

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