Keynes –The Long-term Expectations

Keynes expresses his optimistic outlook for the economy through his use of logic and key terms,economic will be back on the right track, but the politics has triumphed over logic and we forget all the crucial things he explained.He also try to talk about people who run business as livelihood, as opposed to the sake of profit. According to Keynes “The state of long term expectations” is based on mathematical equations combined with the gut feeling of the investor.
Investment in current period is depend on a lager extent about expectations in the future. In the present, since capital equipment can hold it a long time, the entrepreneurs expect about the state of demand, production techniques, etc., some year in the future. It is not just the expectations, but the confidence with those expectations are held. Uncertainty can make entrepreneurs hold back to do negative expectations held with some certainty. No one can pretend to predict economic conditions in five or ten years down the track. But companies need to make decisions now because it have a big impact on the fixed capital with people in its. Keynes makes a interesting point that how investor deal with uncertainty during the financial change. Moreover, Keynes used a lot of key term,like ” prospective yields”, “the state of confidence”, “cold calculation” etc.key term to show that the his positive at his point of view of current economics.
As Keynes said that when enterprises were run by the individuals who owned them, this was very much a lottery and “investment depended on a sufficient supply of individuals who embarked on business as a way of life, not really relying on a precise calculation of prospective profit.” At this point , Keynes uses rhetorical strategies techniques to express his feeling of economics, like he uses “Logos” and “Ethos” techniques to let the reader catch up his optimistic point of view on economy. The key term “scale of investment” means an economic principle that says as production or sales increase, the cost of each unit decreases. For example, a company that increases the production capacity of a factory by adding a second shift can create economies of scale because many costs (such as the lease for the property) do not increase, or increase only slightly, while output doubles. Executives announcing merger agreements often tout economies of scale as one of the advantages of merging. Keynes use inductive reasoning to take a specific fact to represent the larger situation.
Consequently, Keynes thinks the rate of interest will be swamped by swings in expectations as a determinant of investment, and therefore monetary policy will be less effective. Hence, investment is likely to be more surely undertaken by the State. In conclusion, Keynes come to the answer for the how long we will take for expectations, long term or short term, is in chances that if we are take or not. I like his optimistic on economy, and he gives the “hope ” on the recent economy. The way his writes, he uses a lot of key term and the specific facts and evidences to prove his thoughts.

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