Is Keynes theoeitical model still relevant for 21st market based economy?explain.?
Answer:
it really depends on the period you are looking at. long run and short run Aggregate supply are totally different depending on which school of thought you look at it, and they also have different views on the same thing.
Keynesian says delibrate savings is bad(paradox of thrift), while classical views it as an issue not to be worried of as they equate themselves out eventually. Keynes called for government intervention, while classical has no worries about the economy working itself out.
there's no one-size-fits-all school of thought, so depending on the individual and the period in consideration, different theories applies in different situations.
Business cycle is not dead but we face softer landings. Two facts in my opinion were added to the Keynes theoretical model :
1) Psychological aspects.
2) Productivity growth - more growth is not attribute now to labor nor capital but to productivity that is influenced by R&D, better education, networking effects etc.
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