Also, he had a particular role in bringing Keynesian theory
, with the precision of mathematical adjuncts, into association with active economic policy in the United States and, if only in slightly lesser measure, the other developed nations.
called for regulating aggregate demand through counter-cyclical government spending, stimulating the economy when it was sluggish and restraining it when it was too vigorous.
The key ingredient of Keynesian theory
is the assumption that excess capacity is the normal state of affairs, and that fluctuations in demand drive movements in output.
As an in-depth scholarly study of the economics and Keynesian theory
, The Elegar Companion To Post Keynesian Economics delves extensively into a political and theory-based post-Keynesian economics, including essays, analysis and other contributions from dozens of economic leaders worldwide.
It has enacted two general tax cuts and a variety of tax credits, based on a distortion of Keynesian theory
that confuses national monetary theory with state fiscal policy.
The explanation according to the everyday Keynesian theory
can be illustrated as follows.
When Republicans aren't shamelessly using Keynesian theory
for their own ends, they're reverting to the supply-side notion that people will work harder if they can keep more of the money they earn.
If many of the most distinctive features of 1930s Keynesianism were in fact a product of the gold standard, then the move to fiat money regimes should have had very specific effects on the development of Keynesian theory
With broad standard economic indicators (e.g., unemployment and inflation) as examples, Lee's next step is to show how the use of Keynesian theory
since the 1960s has failed.
In 1947, only a year before our seminar, one of the first economics textbook to present keynesian theory
(by Paul Samuelson) came out; it was promptly banned as "communistic" in more than one state.
For a scientist, in this case a professional economist, it would be an unforgivable mistake to think, even for a moment, that the Walrasian theory of stable equilibrium based on numeraire-currency was negating or replacing the Keynesian theory
of unstable equilibrium planted together with anti-numeraire currency in the form of paper- and credit-money.
And, indeed, conventional economic wisdom has by now come to regard the Keynesian theory
as a theory of disequilibrium, which provides a useful way to analyze the process of adjustment to changes in circumstances in a world of relatively rigid prices and wages.