As aggregate demand affects the supply (production, employment and inflation) they saw it as the government's role to build it back up using monetary and fiscal policies. Similar to Classical economists, Keynesian believe the economy comprises the same part: consumer spending, government spending, and business investments. However the major difference is that Keynesians believed government spending could help account for the lack of consumer spending and investment. The Keynesian theory also was based on the idea that wages and prices were sticky and that is would give aggregate supply a horizontal line in the short run. Overall, the main idea of the Keynesian Economist was to save and create jobs and
Adam Smith – Father of Economics Thoughts (1723-1790) – was a social Scottish philosopher, scholar, and political economist. He went to Burgh School where he studied mathematics, Latin, writing and history. At the age of 14, he attended the University of Glasgow, and on 1740, he went to Oxford. In 1748, He started to lecture at the University of Edinburg where he met an economist named David Hume, then they became best friends. Smith’s thoughts and ideas where reflecting the lights of the start of the industrial revolution.
Keynes contrasted his approach to the aggregate supply, focused 'classical' economics that preceded his book. The interpretations of Keynes that followed are contentious and several schools of economic thought claim his legacy. Keynesian economists often argue that private sector decisions sometimes lead to inefficient macroeconomic outcomes which require active policy responses by the public sector, in particular, monetary policy actions by the central bank and fiscal policy actions by the government, in order to stabilize output over the business cycle.  Keynesian economics advocates a mixed economy – predominantly private sector, but with a role for government intervention during recessions. Keynesian economics served as the standard economic model in the developed nations during the later part of the Great Depression, World War II, and the post-war economic expansion
Hayek’s explanation of an economy’s business cycle “The Austrian Business Cycle”: In his book “Prices and Production”, Hayek’s argued that any business cycle commence as a result of a monetary policy or approach that is adopted by governments. Hayek agreed with Adam’s Smith theory of free markets. He argued that despite the fact that markets evolved over time as a result of human actions, at a certain stage markets fail resulting in unemployment and inefficient allocation of resources. On analyzing the factors behind markets failure, Hayek suggested that the reason behind fluctuations in the stability of markets was the intervention of governments in the monetary equilibrium of economies. There he argued for a monetary approach to the origins of the cycle.
His work to counter depression of 1929 and his theory of “debt deflation” were highly ignored by people, as they favored the work of John Maynard Keynes (1883-1946), one of the founders of macroeconomics. Keynes’s solution to overcome the great depression was taken
He attended the Burgh school where he studied Latin, mathematics, history and writing. He then entered the University of Glasgow when he was 14 and in 1740 went to Oxford. Adam Smith was an economist and philosopher and he wrote what is now a day considered the ‘’ bible of capitalism’’. In the book he puts the first details of a political economy. In 1759 Smith published his book The Theory of Moral Sentiments.
Ludwig von Mises broke this circularity with a regressive theorem of money, put forth in his Theorie des geldes und der Umlaufsmittel, translated as Theory of Money and Credit (1912). He illustrated how money originated in the market, and how its value is determined by its usefulness as a commodity for exchange. Mises had closed the Austrian “circle,” and integrated, for the first time in history, the theory of money into the theory of value. In addition, the solution had a very important implication: once the value of money had been shown to depend on the market, the state could not release money and determine its value at will. Today, as governments all over the world inflate their money supply, this idea seems strange.
Locke, Hobbes’s opposing philosopher, was born years later on August 29, 1632, in Wrington, Somerset, England. Contrary to Hobbes, Locke believed that people had rights and that a democracy is the most logical form of governing. Similar to Hobbes, his surroundings and upbringing affected his philosophy. Lokke was raised in a puritan home, and his father had high connections in the government which gave him the access to a good education. He attended Oxford Christ Church where he majored logic and metaphysics, as well as the classical languages.
What products should this or that country sell? The basis of free trade - the removal of restrictions on the movement of goods and services from one country to another – was laid by the Classical economists (mostly British). The neoclassical theory of international trade developed in the framework of the classical theory of international trade. There are some basic fundamental theories: 1. The first theory of international trade was mercantilism (T.Men, A.Serra, A.Monkreten).