Block, SkipCaptcha, Automoderated users, edit
571
edits
Changes
Jump to navigation
Jump to search
Line 7:
Line 7: + + + +
Keynesian economics (view source)
Revision as of 19:25, December 10, 2009
, 19:25, December 10, 2009Inflation/unemployment, stagflation, Laffer curve
According to Keynes, economic slumps are the result of too little [[demand]] (see also [[aggregate demand]]). The government can stimulate demand by cutting taxes and increasing spending even if this results in growing deficits. During times of economic boom the government can increase taxes and/or cut spending. This will reduce the risk of [[Inflation]] and also reduce government deficits. Keynesian economics influenced [[FDR]]'s [[New Deal]] programs during the [[Great Depression]].
According to Keynes, economic slumps are the result of too little [[demand]] (see also [[aggregate demand]]). The government can stimulate demand by cutting taxes and increasing spending even if this results in growing deficits. During times of economic boom the government can increase taxes and/or cut spending. This will reduce the risk of [[Inflation]] and also reduce government deficits. Keynesian economics influenced [[FDR]]'s [[New Deal]] programs during the [[Great Depression]].
Keynes also felt that [[inflation]] and [[unemployment]] were opposites. This was proven false by the "[[stagflation]]" of the 1970s.
While Keynes supported government intervention and government programs, he intended that they only be active during poor economic situations, unlike the modern [[welfare state]]. Many believe that FDR agreed, though FDR had died before these programs could be repealed.
While Keynes supported government intervention and government programs, he intended that they only be active during poor economic situations, unlike the modern [[welfare state]]. Many believe that FDR agreed, though FDR had died before these programs could be repealed.
While liberal in nature, Keynesian economics also had an influence on conservatives - the [[Laffer curve]], a key component of [[supply-side economics]] and the basis for the Reagan and Bush II tax cuts, was based on Keynesian concepts.
==Notes==
==Notes==