Sunday, December 07, 2008

World is flat or World is round, in economics?

It came as a surprise to me that there is one scientific endeavor in the 21st century that is still debating the equivalent of "earth is flat" or "earth is round". I am referring to economics. The two schools of thoughts are the Keynesians and the Austrians. The Keynesian school claims spending is the way out of the current financial crisis. The Austrians claim that saving is the way out of the current financial crisis.
In fact the prescription offered for the current financial ailment by the doctors of the two schools are complete opposites. Clearly economic theory is still in the middle ages.

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