Keynesian economics

(redirected from Keynsian)
Also found in: Financial.

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 ?
These twelve lively essays handle teaching post-Keynesian economics in a society that is still at least partially Keynsian. The essays each have their own methodology and didactic basis, and cover teaching in a mainstream department, the economist who mistook his model for a market, an open system of theorizing in economics, teaching in an open system, pluralism in economic education, truth and beauty in macroeconomics, metaphors to persuade student economists and the public about fiscal policy, seeking inspiration from Paul Davidson, the puzzle of textbooks in America, teaching Keynes's theory to neoclassically formed minds, Keynesian macro models and the special case, and constructing narratives to reaffirm the authority of the professional economist.
Labour's failure to rebut convincingly the attacks from the Conservatives has led it to the unfortunate position of having to discard its Keynsian instincts in order to try to appease the sceptical views expressed in focus groups.
By contrast, traditional economists (Keynsian and neoclassical alike) gained much from the theory of marginal utility.
Gregory Mankiw, "The New Keynsian Synthesis," The Concise Encyclopedia of Economics, http://www.econlib.org/library/Enc/NewKeynesianEconomics.html.
From Syndicalism and Guild Socialism to "Parecon" and Participatory Planning, any number of models has been offered as an alternative to a centrally planned command economy, or merely Keynsian government management of economic activity.
But he is clear that while Labor in the 1940s had adopted Keynsian notions of fiscal policy, this conversion away from sound finance had little impact on that party's many pieces of social legislation.
It is no more than a reversion to Keynsian policies of increasing state spending to build up employment, create wealth and repay public debt from the rising tax income of a stronger economy.
However, it is fortunate that the Conservative-led Government has at least had the good sense to resort to Keynsian state intervention.
This Keynsian approach helped America work its way out of depression in the 1930s.
Last year, German finance minister Peer Steinbrueck also criticised Mr Brown's apparent plans for a Keynsian spending spree.
By contrast UK Prime Minister Gordon Brown argued since the 2008 Wall Street crash that Keynsian economic stimulus works better than tightening your belt when you are already down.
--(1987) "Historical Growth in Participation in Aid to Families with Dependent Children: Was There a Structural Shift?" Journal of Post Keynsian Economics 9 (3): 347-63.