Comparison of 21st Century and 20th Century Contemporary Economics Theories

This report compares emerging theories in 21st century contemporary economics with those of the 20th century. It explores their relation to modern business practices.

CONTEPORARY BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................2
TASK 2............................................................................................................................................2
Comparison between emerging theories & models in 21st century contemporary economics
with those of 20th century.............................................................................................................2
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Contemporary business refers to ideas and circumstances of current time in business
environment. By word contemporary means belonging to same period or of present era. The
current study is based on comparison between emerging models and theories in 21st century
contemporary economics with 20th century. Furthermore, this report explains both theories
relation to modern business practices.
TASK 2
Contrast between rising theories & concepts in 21st century contemporary economics with those
of twenty century
Keynesian economics is a emerging theory in 21st century which is quite dissimilar from
the other one used in 20th century in context of law supply and demand (Jespersen and Olesen,
eds., 2019). According to this concept government must increase demand to increase growth
rather than before. It believes that need or requirement of consumers is key driving force in an
economy that affect business performance and practices rather than before. As an outcome, it
contributes expansionary fiscal policy. The primary techniques of this theory are government
spending on unemployment benefits, infrastructure and education. John Maynard Keynes is the
developer of this theory he is British economist who found this concept in middle 1920s to
1930s. It was radical first one argued that government spending or investment was a important
factor driving aggregate demand which means an maximize in spending would enhance demand.
According to theory spending to maintain full employment is the best and most essential thing as
it helps to balance supply and demand of products and services (Chen, 2020). By investing in
employment opportunities government enhance the strength of corporate sector. All these efforts
will increase the demand of customers in effective manner which in return maximize profitability
and sales.
On the other hand, Mountifort Longfield’s supply and demand theory suggested that
values were identified by supply & demand of products or services based on customer’s
satisfaction, while distribution would be determined by element productivity. This model avoids
belief that wages would remain stuck at subsistence stage (Reisman, 2018). Appropriate

evaluation of Longfield’s place in betterment of economic thought rely in more than fatefully on
dismantling parable, perpetuated by Schumpeter and other historians of economics thought. This
theory helps to analyze the demand of products in market and market price. It can be said that
market price is considered as one of the untimely efforts to create supply & demand concept into
stronger tool of market analysis and go beyond unclear but famous notion of day that it is ration
between supply and demand which identified market price. This theory is based on interaction of
demand & supply on the other side Keynesian economics theory is base on government spending
which increase the demand of consumer more than past few years. Longfield’s theory of values
takes into accounts influence of cost of manufactured upon supply side of calling and equation
attention to demand side.
Keynesian growth theory is used to overcome issues related to insufficiency of aggregate
demand this issue is to be solved by deficit spending. It helps in increasing the growth of
economy by providing better employment chances for local people who are able to supply things
according to consumer’s demands. This theory indicates that government investing during
recessionary periods, restraint in a rapidly progressing economy. Within recession time,
employment or jobs drops off and its rates soar as ventures cut back on size of their employees.
It analyzed that lack of employment decrease demand of consumers for service or other products
as families tighten their hand to purchase items (Morselli, 2019). Thus, a multifaceted downward
spiral is developed. When administration steps into financially stimulate companies, those
organizations being to recruit once again the skilled and talented applicants.
When authorities spend in public works assignments, they directly influence employ that
increase consumers demand. Without access to funding businesses suffered as mortgages were
complex to obtain. When local and nation authority take step in to guarantee loans, marketers are
more powerful in offering capital required in both consumers and business markets. As per view
of this theory government play vita role in supply and demand of goods which is quite beneficial
for businesses growth and long term success within specific sector. The benefit of this theory is
that it tighter control on government investment. While Keynesian theory permits for enlarged
spending of government throughout recession it calls for administration restraint in a quickly
growing economy. This secure increase in demand that spurs inflation, it also pressure authority
to cut save and deficits for next down cycle in economy.

Whereas, Mountifort Longfield's Supply-and-Demand Theory of price defines that when
the demand were increase it affect pricing structure which also get increase rather than before. It
also examine through this theory that when demand and supply increases then equilibrium
quantity goes up and price could go up, stay or down same. The founder of this theory presents
almost overall proto marginalist concept of value in opposite of above theory.
Furthermore, it can be said that both above theories are relate to modern business
practices as they also focus on supply and demand within target market place by offering and
adopting varied principles as well as efforts. Both are related to latest business practices which
focus on supply of products to fulfill the demand of consumers in effective manner offer with
quality that help to retain target buyers for longer period of time. Improve supply chain,
production management, consumers satisfaction, increasing sales, develop sustainability work
policies and marketing are included in modern business practices that directly impact on sales
and revenue within specific sector.
CONCLUSION
From above analysis, it has been concluded that Keynesian growth theory and Mountifort
Longfield’s supply and demand theory are related to modern business activities and performance
as it help to improve supply and demand of products and other items according to needs of
clients.

REFERENCES
Book and Journals
Chen, Y., 2020. The Contributions and Deficiencies of Keynesian Economics. In New Economic
Engine: Effective Government and Efficient Market (pp. 11-21). Springer, Singapore.
Jespersen, J. and Olesen, F. eds., 2019. Progressive Post-Keynesian Economics: Dealing with
Reality. Edward Elgar Publishing.
Morselli, A., 2019. WILLIAM NASSAU SENIOR AND THE RELATIONSHIP BETWEEN
ABSTINENCE, CAPITAL AND INTEREST. Theoretical and Practical Research in
Economic Fields (TPREF). 10(20). pp.96-104.
Reisman, D., 2018. The Circular Flow. In Thomas Robert Malthus (pp. 159-183). Palgrave
Macmillan, Cham.