Chapter 12: Move over Keynes: replacing Keynesianism with a better model
Saving, investing, and capital formation are the principal ingredients of economic growth. Countries with the highest growth rates are those that encourage saving and investing. Such investing in turn results in better consumer products at lower prices. They do not seek to artificially promote consumption at the expense of saving. Stimulating the economy through excessive consumption or wasteful government programs may provide artificial recovery in the short run, but cannot lead to genuine prosperity in the long run.An emphasis on supply-side economics will do a far better job than Keynesianism to encourage sound capital investment and higher living standards.
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