The Classical-Keynesian Paradigm: Policy Debate in Contemporary Era

For almost a century, the famous C-K paradigm (formally known as Classics – Keynesian Paradigm) has been the apex of economic debate and research. The paradigm represents two schools of thoughts which, somehow, have prevailed till now. Economists who believe in either of the two schools have been at loggerheads, and they still are, to prove one theory better than the other. Numerous economic scholars of present era believe that with the changes that have occurred in the economic system, the world is turning back to classical model. But, there are others who believe that Keynes theory is still alive and valid. In this paper, we have tried to draw a brief comparison that highlights the major differences between the two theories with specific reference to the economic, political and social environment prevailing at time when these theories were generated. Paper also discusses the relevance of unending policy debate about these theories in the current era with special emphasis on policy implications with a view to draw pertinent lessons for the present and future.