Study Cards on economic, inflation, policies
How can this question be answered?
Keynes' ideas were undermined by their association with the 'tax and spend' policies that might have sapped enterprise and initiative, and undermined growth by creating permanently high inflation.
Neoliberalism therefore amounts to a form of market fundamentalism (absolute faith in the market to provide solutions to all economic and social problems).
Keynesian policies are designed to boost output and reduce unemployment, which merely fuel inflation by encouraging governments to borrow (print money).
Alternative: shift away from demand-side policies that encourage consumers to consume, and towards supply-side policies that encourage producers to produce. This invariably means deregulation and tax cuts.
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