Milton Friedman

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consumers confidence in the
economy. Worried consumers may then try to weather the coming economic hardship
by saving their money, but because my spending is part of your earnings, my
decision to hoard money makes things worse for you and you, responding to your
own difficult times, will start hoarding money too, making things even worse for
me. So actually, everything is related. People hoard money in difficult time s,
but times become more difficult when people hoard money. That was basically how
Keynes explained the recession. He also came up with a solution to it.
The cure for this, was for the central bank to expand the money supply.
Keynes said, "by putting more bills in people's hands, consumer confidence would
return, people would spend, and the circular flow of money would be
reestablished(Keynes, 232)." That was the cure and explanation to the recession,
but what about the depressions? Keynes believed that depressions were recessions
that had fallen into a ...

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