Hayek vs. Keynes Debate

The Hayek vs. Keynes debate revolves around how economies recover from downturns. Keynes believed that during recessions, government should intervene by increasing spending and cutting taxes to stimulate demand and boost growth. Hayek argued that markets are self-correcting and that government interference often causes more harm, leading to inflation and misallocation of resources. Essentially, Keynes saw government action as necessary for recovery, while Hayek emphasized reducing government role to let free markets balance themselves naturally. This debate shapes economic policies on how best to maintain stable and prosperous economies.