Keynesian Unemployment Theory
1 Introduction
About 400 year b.c.e., Greek historian and philosopher Xenophon was first to use in his writings the word economy (oeconomicus) – which in translation means managing the household.
Despite the name, economic ideas were and remained an integral part of the entire society.
From antique to Greece today, the economy, as a social science, traded, developed and shaped under the influence of current of occurrences, changes and needs of the people.
Keynes’s theory represented the biggest inspiration to European States and economic theoretics in the period between 1941 and 1976. In this period the macroeconomics has become a special scientific and teaching discipline. Full employment is becoming the main objective of national economic
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This period is characterized by many economists as a fall of Keynesianism following several decades of ascents, or new theoretical crisis, because existing Keynesian ortodoxy had no solution for the newly created …show more content…
All the unemployed have hard time getting jobs for a number of years, they are on the Bureau and struggling with poverty, depression and social exclusion. Most of the countries in the world are fighting frightening recession.
European Union alone has over 23 million unemployed, making up for more than 10% of the working force.
The rich are getting richer and the poor are getting poorer. The differences between the classes are becoming larger, and conflicts all the sharper. Capitalism is destroying the middle class and affecting the concentration of wealth and capital in the hands of the richest.
Many living spaces were permanently destroyed or polluted to the extent that they endanger human lives. In a continuous race for profit environmental disasters have become a normal thing, to whose occurrence people have become alarmingly indifferent.
Figure 1, European unemployment rate
Neo-liberal capitalism is not only unfair in the social aspect. Free markets and "the invisible hand" are not in a position to direct the economy in the right direction. Instead it comes to building excessive capacities and overproduction of products that are not really needed. This excess supply is absorbed by bizarre marketing campaigns, which unscrupulously try to create artificial demand by creating fake consumption consciousness in
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