The investment approach to economic analysis and modern keynesianism

Yaroslav Kvach
Doctor of Economics, Professor of Finance, Monetary Circulation and Credit Department, Director of Odessa Finance Institute of Ukrainian State University of Finance and International Trade, e-mail:coach8807@mail.ru

Cite this article:

Kvach, Y. (2015), The investment approach to economic analysis and modern keynesianism. Ed.: M. Zveryakov (ed.-in-ch.) and others [Investytsiinyi pidkhid do analizu ekonomiky i suchasne keinsianstvo; za red.: М. I. Zveriakova (gol. red.) ta in.], Socio-economic research bulletin (ISSN 2313-4569), Odessa National Economic University, Odessa, Issue 2, No. 57, pp. 11–17.

Abstract

The article considers the adequacy of different directions of neokeynesian theory to the tasks of scientific substantiation of the economic policy in Ukraine, which is aimed at overcoming the crisis. It is proved, that the solution to crisis needs to be searched, primarily, in the expansion of investment demand. In such a depressed economy after growth of investments will inevitably begin to grow the consumption without threatening in this case increasing of inflation. Therefore, the high levels of consumption can be achieved through investments. On the particular example it is showed, that a shift in emphasis from consumer to investment demand allows to bypass the contradiction between keynesianism and monetarism. It was suggested that the issue of new money was an institutional, as more as possible directly linked with investments in the development of real production and, thereby, ensured by commodity coverage. It is concluded, that in the concrete historical conditions in which Ukraine is today, it is possible to stimulate recovery from the crisis and revitalizing the economy without resorting to inflationary financing.

Keywords

crisis; investments; keynesianism; monetarism; inflation.

JEL classification: E12, R10

UD classification: 330.341.4 (477)

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