How do Keynesian economics relate to the Ministry of Labour?

Kelsea; I’ll Cover You, MJ: How do Keynesian economics relate to the Ministry of Labour?
I have such a hard time wrapping my mind around Keynesian economics/policies. Can anyone give me a short ‘for dummies’ rundown of Keynesian economics… and perhaps some suggestions to ho this would relate to the Ministry of Labour and labour policies. Thanks in advance!

Answers and Views:

Answer by Raha
A short “for dummies” rundown of Keynesian economics is not that easy, since economic theories are rather complex, but let me try and make a couple of points about what Keynes says in the general theory.

Keynes believed that the main malady of capitalism was unemployment. He believed that the main reason for this was underinvestment, not enough investment to maintain full employment. He proposed an expansionary monetary policy in order to bring interest rates down. He considered high interest rates as a significant obstacle to an adequate investment level in order to ensure full employment.

According to Keynes firms plan their investments comparing the schedule of the marginal productivity of capital(the expected added revenue that a firm expects to accrue from increased output by adding an additional unit of capital) to the interest rate, hence the need for a low interest rate in order to ensure adequate investment.

Keynes also believed that the marginal propensity to consume was too low in order to ensure sufficient demand especially as income rises. He supported redistribution of wealth in order to maintain sufficient demand in the economy.

Furthermore, Keynes introduced the notion of a liquidity trap, a situation where monetary policy is rendered useless when the interest rate is up against the zero bound. In a situation like that he proposed an expansionary fiscal policy with the government undertaking public investments in order to boost the economy.

Public investments would be the link between Keynesianism and the ministry of labour, but obviously Keynesian policies pertain to the entire government.

I’m not sure if that was what you were looking for, but it was a short and simple as i possibly could. As i said describing an entire theory in a couple of paragraphs is not an easy task. There are entire books devoted to the various economic theories.