Which policy is better for government during a recession

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Keynesian Theory

Keynesian economists would suggest that, during a recession, the government should use stimulus efforts to help support the economy during that recession. Later, after the recession, Keynesian theory would suggest reducing government spending during a productive economy. Austerity measures, during a recession, operate on the opposite perspective from Keynesian theory in that Austerity promotes the reduction of government spending, and government deficits, in economic downturns.

- Read the article "Austerity leads to austerity!" and

- Watch the video, "Risk on, austerity wins in Greece".

Explain which perspective, Keynesian or Austerity, is better policy for government during a recession.

Here is the video link https://www.youtube.com/watch?v=SyE_J5Ei1dY

Here is the link to the article https://www.forbes.com/sites/johntharvey/2013/05/01/austerity-leads-to-austerity/#2715e4857a0b6bfcdaf922d3

Reference no: EM13945493

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