Modern Examples of the Schools of Economics

Modern Examples of the Schools:

Classical School:

·        Trickle Down tax policies.  Lower taxes on the rich.   They control industry and when they profit more, they will build more industries.  More workers will be hired.  Everyone will benefit.

·        Lower taxes on businesses and individuals.  This will help production and consumption and make industry more efficient.

·        Reduce power of groups like inefficient unions that block wage adjustments and flexibility.  Create more “Right to Work” laws.  

·        Support more free trade like the EU, NAFTA, CAFTA, and the WTO.

·        Get rid of socialistic, anti-competition parts of the economy.

·        Lower tax revenues that the government can collect in order to minimize the way government can afford to interfere in the economic markets.

Keynesian School:

·        Countercyclical Fiscal Policies like tax cuts during recessions.

·        Social Security programs to help form a safety net for the elderly.

·        Unemployment insurance benefits to help soften the blow of unemployment.

Monetary School:

·        Bond sales and purchases as policy tools (The Open Market Committee)

·        The Fed Fund Interest Rate targets.

·        The bank Discount Rate

·        The bank Reserve Requirements