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Definition of 'Keynesian Economics'
An*economic theory stating that active government intervention in the marketplace and monetary policy is the best method of ensuring economic growth and stability.
Read more: Keynesian Economics Definition | Investopedia
With all due respect, the Investopedia definition is a caricature. Keynesian economics lays out a role for government in helping manage the economy. It argues for an expansionary fiscal policy during periods of economic weakness to address an output gap and for mopping up the stimulus during periods of growth. U.S. policy makers have had a bias for accommodation. They've focused on the first element, but ignored the latter one. Due to that bias for accommodation, once the economy has strengthened, one has not seen a concerted policy effort to mop up the stimulus. As a result, temporary spending measures have often been extended, as have temporary tax cuts. The end result has been a greater accumulation of public debt than would have been the case were the latter aspect of Keynesian economics applied.
For those who are interested, Keynes's classic work, The General Theory of Employment, Interest, and Money can be found here: http://cas.umkc.edu/economics/peopl.../courses/econ645/Winter2011/GeneralTheory.pdf
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