Abstract
As a starting point, the article reviews Keynesian business cycle theory and identifies the cause of economic crisis to blind investment and lack of demand. The article also indicates that fundamentally, the 1929 Great Depression and current global economic recession are the inevitable outcomes of capitalist mode of production. After that, it demonstrates that the strategy of trying to develop public economy as well as increasing its influences and controls over investment and consumption is the only way to limit vicious expansion of capitalist mode of production and prevent future economic crises.
Highlights
As a starting point, the article reviews Keynesian business cycle theory and identifies the cause of economic crisis to blind investment and lack of demand
As China is strengthening its connection with the outside world, its economy becomes part of the world economy
In consideration of quick expansion of Chinese economy and its participation in the world economy, each economic policy adopted by China will play an indicative role in the world economy
Summary
The article reviews Keynesian business cycle theory and identifies the cause of economic crisis to blind investment and lack of demand. 2. The essence of the financial crisis – investment bubble and insufficient of effective demand As the rapid development of global productivity and unbalanced distribution of income, a large portion of capital accumulated is controlled by a few people.
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