The central assumption of classical economics is that the economy is self-regulating and that little or no government intervention is necessary. If a need arose within an economy, classical economists say, it would be met through a market player.
The best-known classical economist is Adam Smith, an eighteenth-century philosopher and also known as the father of fashionable economics. Smith wrote the influential text “The Wealth of Nations. “
Classical economics was based on the assumption that flexible markets can simply self-regulate and necessarily rejected the concept of significant government interference. Keynesian economics, on the other hand, calls for greater government involvement, basically to stimulate aggregate demand for economic purposes.
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Mises Institute. “Lord Keynes and Say’s Law”.
International Monetary Fund. “What is Keynesian economics?”
Adam Smith Institute. “The wealth of nations”.
Adam Smith Institute. “The theory of moral sentiments. “