What is 'Keynesian Economics'?

Keynesian Economics is an economic theory of total spending in the economy and its effects on output and inflation developed by John Maynard Keynes. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Term of the Day | Words to Know Keynesian Economics Keynesian economics is an economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed by the British economist John Maynard Keynes during the 1930s in an attempt to understand the Great Depression. Keynes advocated for increased government expenditures and lower taxes to stimulate demand and pull the global economy out of the depression. Subsequently, Keynesian economics was used to refer to the concept that optimal economic performance could be achieved—and economic slumps prevented—by influencing aggregate demand through activist stabilization and economic intervention policies by the government. Keynesian economics is considered a "demand-side" theory that focuses on changes in the economy over the short run. Read More » Related to "Keynesian Economics" Giants of Finance: John Maynard Keynes Keynes's book "General Theory" will forever be remembered for giving governments a central role in economics. Read More » Keynesian vs. Neo-Keynesian Economics: What's the Difference? Learn the similarities and differences between the Keynesian and Neo-Keynesian theories of economics. Read More » SPONSORED BY FIDELITY INVESTMENTS Fidelity's Unique Career Opportunities With extensive training and rewarding work, Fidelity stands out when it comes to career development. Here are some of the key benefits they offer employees. Learn More » Monetary Policy vs. Fiscal Policy: What's the Difference? Monetary policy involves decisions by central banks on issues such as interest rates. Fiscal policy typically is established legislatively and addresses issues such as tax rates and government spending. Read More » The Investopedia Express Podcast is Live! Get ready for the week ahead with Investopedia's Editor in Chief, Caleb Silver, as he digs into the most important stories in finance and global economics. Listen Now On: Apple Podcasts » Spotify » Google Podcasts » Related Definitions Inflation Inflation is a general increase in the prices of goods and services in an economy over some period of time. Read More » Economist An economist is an expert who studies the relationship between a society's resources and its production or output, using a number of indicators to predict future trends. Read More » The Great Depression The Great Depression was a devastating and prolonged economic recession that followed the crash of the U.S. stock market in 1929. Read More » Classical Economics Classical economics refers to a body of work on market theories and economic growth which emerged during the 18th and 19th centuries. Read More » CONNECT WITH INVESTOPEDIA Email sent to: mondemand.forex@blogger.com To update your newsletter preferences or unsubscribe, click here. 114 West 41st St, floor 8 New York NY 10036 © 2020, Investopedia, LLC, All Rights Reserved | Privacy Policy