Summarizing.

1. The great depression of the 1930s demonstrated that the market system does not automatically lead to full employment.



2. Classical economic theories stated that excess savings would cause interest rates to fall and investment to increase again.



3. Keynes did not recommend governmental intervention in the economy.



4. In the 1950s and 1960s Milton Friedman said that Keynesian fiscal policy had negative long-run effects.



5. Monetarists insist that free markets and competition are efficient and should be allowed to operate with a minimum of governmental intervention.



6. Keynesians believe there is still a role for either expansionary or deflationary policies.