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Keynesian economics is ‘almost dead’ and its replacement ‘in a decade or two’

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The most influential economists on the economic world stage have rejected the notion that the Keynesian economics that underpinned the world economic system for half a century is “almost dead”.

The idea that the world is entering a new era of competitive economic equilibrium is now in the “near future”, the Organisation for Economic Co-operation and Development (OECD) has said in its annual report on economic growth.

Keynesian economists such as Milton Friedman, Friedrich Hayek and Robert Lucas argued that economies could achieve full employment in the short term only if they are also competitive, and that if that were possible, they should use fiscal policy to achieve that goal.

But they also believed that economic growth could be sustained if the world was also competitive.

The OECD says it expects the world’s gross domestic product to grow at a pace of about 2% per year over the next two decades.

In its latest World Economic Outlook, published on Thursday, the OECD said it is now “almost impossible to predict when economic growth will return to its post-Keynesians peak”.

That “would have the unintended consequence of driving down wages, and perhaps inflation too, and raising unemployment,” it said.

“Such a change in the dynamic would have a negative effect on economic and financial conditions.”

In the end, the economists’ view was that “the world economy has reached its equilibrium” and that “no fundamental shift is required to achieve it”.

“The world economy remains in the ‘near term’, with relatively stable fundamentals,” they wrote.

That means that it is possible for governments to continue to invest and invest and do things in a way that maximises growth and prosperity, they added.

At the same time, the authors of the World Economic Forum’s annual assessment of economic performance in 2013 warned that the next stage of the economic recovery is likely to be “in a generation or two”.

In an article on the theme, economists for the World Bank and the World Development Bank said they expect the world economy to continue “growing at the rate of 2.2% per annum” until 2025.

They added that the OECD forecasts “that the world will be in a recession in the first quarter of 2019” and will continue to see growth slow to about 1% per person per year until 2035.

Their assessment is consistent with other research from the Organisation of Economic Co,D and D, the World Resources Institute and the International Monetary Fund.

Friedman, the man who coined the term “Keynes” to describe the economic system underpinning the world, was also sceptical about the possibility of the world entering a “new equilibrium”.

“I think it is a very remote possibility,” he told the Financial Times.

However, the former governor of the Federal Reserve Bank of New York, Paul Volcker, is a fan of Keynesianism and said it was important for governments and businesses to remain competitive.

“I do not think you need to go into Keynesian mode for businesses to compete in a globalised economy,” he said.

“You need to compete with other countries that have a competitive system.”

The OECD and the OECD’s report, titled “The New Economy: A New World Order?”, argues that the global economy is now capable of delivering on its potential, but that it faces a “moment of truth” if it wants to achieve full-employment.

It also warned that a “globalised world” could not afford to wait for the world to recover from the financial crisis and the recession that followed.

And in an article for The New York Times, economists at the Bank for International Settlements and the IMF said they were “not convinced” that the recovery from the crisis is sustainable.

If it “does not get back to full employment soon” and if growth does not return to pre-crisis levels, the countries could find themselves “worse off than before” the crisis, the report said.

The OECD is one of the few countries that has a policy instrument that explicitly recognises the need to make the world competitive again.

A number of policies are in place to encourage economic growth and job creation, and they are aimed at promoting trade and investment, reducing inequality and reducing unemployment.

The World Bank is also a major supporter of the global economic system, and it has a long-standing policy of helping countries achieve a return to full-time employment and to improve their social welfare systems.

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