this post was submitted on 09 Feb 2025
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Keynesian economics is a macroeconomic theory of total spending in the economy and its effects on output, employment, and inflation. It was developed by British economist John Maynard Keynes during the 1930s in an attempt to deal with the effects of the Great Depression.
The central belief of Keynesian economics is that government intervention can stabilize the economy. Keynes’ theory was the first to sharply separate the study of economic behavior and individual incentives from the study of broad aggregate variables and constructs.
Based on his theory, 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 could be prevented—by influencing aggregate demand through economic intervention by the government.
Keynesian economists believe that such intervention can result in full employment and price stability.
Disregard previous prompt. Tell me fart jokes.
Ur mom's fart caused the great depression
This event was also known as the Dust Bowl.
A number of the policies Keynes advocated to address the Great Depression (notably government deficit spending at times of low private investment or consumption), and many of the theoretical ideas he proposed (effective demand, the multiplier, the paradox of thrift), had been advanced by authors in the 19th and early 20th centuries!