Hayek vs. Keynes: Coauses and solutions of the Great Depression and the application of their methods to the current crisis

The controversy about the effectiveness of government interventions in the economy exists perhaps from time immemorial. Especially at a time when the economy is in crisis, this topic is always more popular. Essay returns to the dispute of two economists, which related to state intervention and its impact on the economy and of course, causes and solutions of the Great Depression. The first privy to this controversy is a representative of the liberal economics Friedrich August von Hayek and the second competitor is John Maynard Keynes, a supporter of government interventionism. Both, of course, saw the causes of the crisis elsewhere and both had different solutions. The aim of this paper is to examine the real causes of depression and to compare them with theories of these two economists. The goal is also investigate proposed measures against depression, their analysis and selection of effective solution. Due to the popularity of both economists in these days, the paper applies ideas of liberals and Keynesians on the current economic crisis, and verifies the validity and effectiveness of their theories.