Keynesian Economics

Keynesian Economics - KEYNESIAN ECONOMICS What is Keynesian...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
KEYNESIAN ECONOMICS What is Keynesian Economics? o A theory on how to prevent a recession and curb inflation based on the circular flow of money. o Keynesian economics warns against the practice of too much saving and not enough spending in the economy, and it also supports considerable redistribution of wealth by the government, when needed. Who is John Maynard Keyes? o A British Economist o Wrote the book “The General Theory of Employment, Interest and Money” o Believed that the government should play an active role in supporting the demand for goods and services in order to preserve employment and prevent a recession. This could be done by lowering interest rates and taxation, as well as funding more public projects. o The need for substantial government spending during the Second World War supported Keynes’ ideas; therefore, after the war many countries implemented Keynes’ philosophies. Flaws in the Theory
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/05/2011 for the course ECON 011 taught by Professor Yezer during the Fall '07 term at GWU.

Ask a homework question - tutors are online