Keynesian Economic Theory
John Keynes was an English economist and founder of Keynesian economic theory whose ideas greatly impacted modern economics as well as any government fiscal policies. Keynes was one of the greatest and most influential economists of the 20th century. For this reason, he is known as "the father of modern economics (Keynesian theory).” His popular expression "In the long run we are all dead" is still quoted today (Wikipedia). Many refer to Keynes as the father of modern economics; he made a great impact on contemporary economic as well as political theory. Due to his greatness, Governments for their fiscal policies tapped his ideas. He is most well known on his interventionist policy when it comes to fiscal and monetary measures, specifically, to mitigate the undesirable effect of recessions, depressions, and even booms.
He made many great accomplishments during his time and probably his greatest was what he did for America in its hour of need. During the 1920's, the U.S. experienced a stock market crash of enormous proportions, which crippled the economy for years. Keynes knew that to recover as soon as possible, the government had to intervene and put a decrease on taxes along with an increase in spending. By putting more money into the economy and allowing more Americans to keep what they earned, the economy soon recovered and once again became prosperous. Keynes ideas were very radical at the time, and Keynes was called a socialist in disguise. Keynes was not a socialist, he just wanted to make sure that the people had enough money to invest and help the economy along.
John Maynard’s economic theory provides that the government is responsible to smooth out the bumps in business cycles. These interventions would come in different forms depending on the prevailing economic or market condition such as: government spending and tax breaks to...