Keynesian economics
Government spending advocacy
Keynesian economics is a theory holding that government spending and tax policy can stabilize economies during downturns.
The approach, associated with economist John Maynard Keynes, argues that private demand sometimes fails to sustain full employment, justifying deficit spending to stimulate growth.
The New Deal drew on Keynesian economics.
The adjective Keynesian describes policies or economists favoring such intervention.
State allocation of funds
- deficit spendingExpenditures funded by debt
- budget deficitSpending exceeding revenue
- public worksGovernment-built community structures
- tax cutsDecreased government assessments
fiscal stimulus · discretionary spending · deficit financing · pump priming · infrastructure investment · income support · New Deal · WPA
Price paid for borrowing
- monetary policyCentral bank economic controls
- central bankNational currency management institution
- money supplyTotal currency in circulation
- quantitative easingAsset purchases to boost economy
Prolonged economic decline
- depressionProlonged low state
- business cycleEconomy's periodic ups and downs
- boom and bustRecurring economic extremes
- economic recoveryReturn to prosperity
unemployment · economic contraction · expansion · trough · peak · Great Depression · stagflation · capacity utilization
government spending
State allocation of funds
- deficit spendingExpenditures funded by debt
- budget deficitSpending exceeding revenue
- public worksGovernment-built community structures
tax cuts · fiscal stimulus · discretionary spending · deficit financing · pump priming · infrastructure investment · income support · New Deal · WPA
interest rates
Price paid for borrowing
- monetary policyCentral bank economic controls
- central bankNational currency management institution
- money supplyTotal currency in circulation
recession
Prolonged economic decline
- depressionProlonged low state
- business cycleEconomy's periodic ups and downs
- boom and bustRecurring economic extremes
economic recovery · unemployment · economic contraction · expansion · trough · peak · Great Depression · stagflation · capacity utilization · financial instability
multiplier effect
How spending compounds economically
- animal spiritsInstinctive economic confidence
- economicssupply and demand, inflation, GDP, GNP, gross domestic product
- UK economyBank of England, pound sterling, GDP, London Stock Exchange, sterling
- fiscal policybudget deficit, deficit spending, national budget, budget surplus, budget deficits
- macroeconomicsGDP, GNP, gross domestic product, gross national product, inflation rate
- British EconomyBank of England, pound sterling, sterling, GDP, budget deficit
- free marketsfree market, free enterprise, free trade, free markets, laissez-faire
Keynesian economicslaissez-faire economics
Minimal state economic involvement
Austrian economics · classical economics · monetarism · neoliberalism · Milton Friedman