Keynesian paradigm

Interest or profit?

Despite evidence to the contrary, mainstream economic theory continues to maintain that interest-based financing allocates resources efficiently. Conventional stabilization policies have met with limited success. The main reason is that they are based on flawed economic analysis, the Keynesian paradigm. A closer look indicates that this theory is deeply flawed. The primary flaw in this model is the assumption that interest is little different from profit as an incentive to ensure an efficient allocation of resources.

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Chapter IV – Keynesian paradigm