Keynesian Economics
(Redirected from Keynesianism)
Jump to navigation
Jump to search
A Keynesian Economics is a school of economic thought that economic output is strongly influenced by aggregate demand (total spending in the economy).
- AKA: Keynesianism.
- Example(s):
- Counter-Example(s):
- See: Macro-Economics, Inflation, Short Run, Recessions, Output (Economics), Aggregate Demand, Aggregate Supply, Great Depression.
References
2016
- (Wikipedia, 2016) ⇒ https://en.wikipedia.org/wiki/Keynesian_economics Retrieved:2016-12-15.
- Keynesian economics (or Keynesianism) are the various theories about how in the short run, and especially during recessions, economic output is strongly influenced by aggregate demand (total spending in the economy). In the Keynesian view, aggregate demand does not necessarily equal the productive capacity of the economy; instead, it is influenced by a host of factors and sometimes behaves erratically, affecting production, employment, and inflation. [1] The theories forming the basis of Keynesian economics were first presented by the British economist John Maynard Keynes during the Great Depression in his 1936 book, The General Theory of Employment, Interest and Money. Keynes contrasted his approach to the aggregate supply-focused classical economics that preceded his book. The interpretations of Keynes that followed are contentious and several schools of economic thought claim his legacy. Keynesian economists often argue that private sector decisions sometimes lead to inefficient macroeconomic outcomes which require active policy responses by the public sector, in particular, monetary policy actions by the central bank and fiscal policy actions by the government, in order to stabilize output over the business cycle. Keynesian economics advocates a mixed economy – predominantly private sector, but with a role for government intervention during recessions. Keynesian economics served as the standard economic model in the developed nations during the later part of the Great Depression, World War II, and the post-war economic expansion (1945–1973), though it lost some influence following the oil shock and resulting stagflation of the 1970s. The advent of the financial crisis of 2007–08 caused a resurgence in Keynesian thought, which continues as new Keynesian economics.