Keynesian economics

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Keynesian economics

(ECONOMICS) an account of the working of macroeconomic systems first propounded by John Maynard KEYNES, in which it is assumed that the economy is not self-managing and that governments must act to avoid prolonged recessions and secure FULL EMPLOYMENT. Directly at odds with much that had been previously assumed (see NEOCLASSICAL ECONOMICS), Keynes proposed government management of the economy – through monetary as well as fiscal policies – in which government expenditure would be increased at times of recession and reduced at times of FULL EMPLOYMENT and INFLATION, thus controlling aggregate demand within the economy. The adoption of Keynesian policies by governments seemed to be successful until the 1960s, when inflation and lack of economic growth began to emerge as a problem. Since then, while Keynesian economics still has many supporters, other macroeconomic theories, notably MONETARISM, have been in the ascendant.
References in periodicals archive ?
This emanates from the classical demand-side economics, where governments expect private sector demand to follow public sector investment - the so-called 'crowd in' effect.
Even then, I had indicated that it can't be likened to 'Reaganomics' of the 1980s, which was defined by a distinct economic philosophy known at the time as 'supply side economics.' It was a direct challenge then to the orthodoxy of traditional demand-side economics associated with John Maynard Keynes (hence 'Keynesian' economics).
Instead of supply-side economics, we should return to the demand-side economics of Franklin Roosevelt.

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