economy friendly

The belief in the self-correcting quality of the market and the 'invisible hand' of Adam Smith got a major setback in an early 20th century during the Great Depression (1929). The impact of the depression spread from the USA to other economies of Western Europe escalating large-scale unemployment, downfall in demand and economic activities and lockouts in industrial enterprises. The prevailing Smithsonian macro ideas failed to check the crisis. A new approach was needed which came in the famous work, The General Theory of Employment, Interest, and Money (1936) by the English economist at Cambridge University, John Maynard Keynes (1883-1946). Keynes questioned the very principles of 'laissez-faire' and the nature of the 'invisible hand'. He even opined that the invisible hand brings equilibrium to the economy but by 'strangulating the poor'. He suggested that prices and wages are not flexible enough to provide employment to all. It means there will...

The relation between economics and the economy, simply saying, is that of theory and practice. While the former is a discipline studying the economic behavior of the human beings, the latter is a still frame picture of it. Economics will come out with theories of the market, employment, etc., and an economy is a real picture of the things which emerges after the application of those theories. The economy is economics at play in a certain region. This region is best-defined today as a country, a nation- the Indian Economy, the Russian Economy, The French Economy, etc. The economy as such means nothing. It gets meaning once it is preceded by the name of a country, a region, a block, etc. When we say developed countries. Countries of the world might be facing some common economic challenges. At the same time, they might be facing some highly specific challenges. Economists, during the period of evolution of economics, have suggested some fixed number of theories and the methods ...