Keynesian economics

Term of the Day Keynesian economics A school of economic thought founded by the UK economist John Maynard Keynes (1883-1946) and developed by his followers. In 1936, at the height of the great depression, Keynes' landmark book The General Theory OfEmployment, Interest And Money caused a paradigm shift for economics: it suddenly replaced their emphasis on study of the economic behavior ofindividuals and companies (microeconomics) to the study of the behavior of theeconomy as a whole (macroeconomics). The main plank of his revolutionary theory is the assertion that the aggregate demand created by households, businesses and the government and not the dynamics of free markets is the most important driving force in an economy. This theory further asserts that free markets have ... Learn more about this term Usage Example When developing what is now known as Keynesian economics, John Maynard Keynes argued that increased involvement of the government in markets would stabilize prices and stimulate economic growth.

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