Keynesian Economics

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Keynesian Economics

A school of thought developed by John Maynard Keynes built on the proposition that aggregate demand is the primary source of business cycle instability, especially recessions. The basic structure of Keynesian economics was initially presented in Keynes' book The General Theory of Employment, Interest and Money, published in 1936. For the next forty years, the Keynesian school dominated the economics discipline and reached a pinnacle as a guide for federal government policy in the 1960s. It fell out of favour in the 1970s and 1980s, as monetarism, neoclassical economics, supply-side economics and rational expectations became more widely accepted, but it still has a strong following in the academic and policy-making arenas. Source: MAANZ

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