How to apply Keynesian policies in different stages of the economy? What is the expected effect?

Keynes lived in Britain, and the laissez-faire private enterprise system is transitioning to private monopoly. After the 20th century, Britain, as a laissez-faire private enterprise system, began to get what people call "English disease" today. During the First World War, Britain was forced to suspend the gold standard for many years because of the sharp increase in expenditure, and then the currency expanded rapidly. After the war, Britain, as a colonial and industrial power, gradually declined. By the early 1920s, due to the wrong decision of the rulers, Britain's already depressed economy was even more depressed: domestic investment demand was sluggish and the number of unemployed people increased sharply. Faced with the huge unemployment problem, there are also various views, including reducing unemployment by public works and opposing the use of public works to increase employment based on neoclassical school. The "English disease" in the 1920s made Keynes think about unemployment earlier. Then the consequences of the recovery of the gold standard make it consider the relationship between deflation and increased unemployment; The problem of public works made Keynes consider the relationship between fiscal policy and unemployment. Although these are the direct social reasons for the emergence of Keynesianism, they laid the foundation for the emergence of Keynesianism in the future. From 1929 to 1933, an unprecedented serious economic crisis broke out in the capitalist world. This great crisis shocked all major capitalist countries and swept through all colonies and semi-colonies. After four years of great crisis, the whole capitalist world fell into a long-term special economic depression. Western countries call this great crisis and the Great Depression that followed it "the Great Depression of the 1930s". During the Great Depression, productivity was greatly damaged, and the industrial output of the whole capitalist world fell back to the level of 1908- 1909, which lasted for about 20 years, resulting in as many as 40 million to 50 million unemployed people in various countries. Facing the unprecedented serious crisis and unemployment, the ruling class and the ruling group no longer appreciate the traditional economics that denies the possibility of crisis and unemployment, but hope for a new kind of economics, which should admit the crisis and unemployment, but not the root of the crisis and unemployment lies in the capitalist system; It is necessary to prove that the capitalist system can prevent crisis and unemployment, not overthrow it; It is necessary to put forward laws to prevent and control crises and unemployment, not just vague comments; To combat Marxism and the socialist system, we must not allow any ideological trend of turning to scientific socialism to exist and spread. Keynesian economics is such a kind of psychological economics that conforms to the wishes of the ruling class and the ruling group. It is not only the direct product of the Great Depression in 1930s, but also the inevitable product of state monopoly capitalism. 1936, Keynes published the epoch-making General Theory of Employment, Interest and Money. In his General Theory, Keynes systematically demonstrated the economic intervention policies implemented by western capitalist countries, revolutionized neoclassical economics from three aspects: theory, method and policy, and replaced it as the orthodox school of western economics, which had a great influence on western economists and economic policies of western countries. The publication of General Theory of Employment, Interest and Money caused a sensation in the shocked western world after the Great Crisis. It overthrew the traditional economic theory and formed a new economic theory. Keynesian economic theory holds that there is no strong automatic mechanism for production and employment to develop in the direction of full employment, which is contrary to Say's law in neoclassical economics. Say's law holds that the automatic adjustment of prices and interest rates will often create full employment. In addition, Keynesian economics emphasizes the importance of macro-aggregate analysis and effective demand, points out that wages are rigid in downward adjustment, and advocates replacing the laissez-faire policy of neoclassical school with state intervention policy. The publication of The General Theory can be regarded as an important symbol of the emergence of Keynesianism. Of course, Keynes's economic theory still has some limitations: Keynes's short-term static thought led him to exaggerate the long-term economic stagnation trend, and he underestimated the possibility of technological change and the new capital investment it might inspire; As far as space and time are concerned, Keynes is extremely narrow; Keynes was very willing to accept wasteful expenditure, and he agreed that private wasteful expenditure was as much as public wasteful expenditure. Of course, in the history of economic thought, Keynes was not the only one who exaggerated his thoughts in order to convince the audience and readers. And he did convince his audience and readers that his ideology has gradually become the orthodox macroeconomic thought of all industrialized countries. Neo-classical comprehensive school is the product of the new historical conditions after the post-war economic development and changes. Neo-classical comprehensive school is macroeconomics gradually formed with the efforts of a group of American economists represented by Samuelson. A series of latest research results based on Keynes's basic theory have been integrated to form the so-called "macroeconomics". Traditional economic theories, including price theory, consumption theory, production theory, market theory, distribution theory, general equilibrium theory and welfare economics, are called "microeconomics". Neo-classical comprehensive school is the most influential Keynesian school after the so-called Keynesian revolution, and has successively called itself "post-Keynesian mainstream economics". Due to the existence of "debt" in the western world, the policy suggestions of "post-Keynesian mainstream economics" cannot be implemented. When unemployment and inflation coexist, its compensatory fiscal policy will have contradictory consequences, which also causes the school to adopt the views and theories of the new school on the basis of the original neoclassical comprehensive school. Neo-Cambridge School is another important branch of modern Keynesianism. In the process of understanding and inheriting Keynesianism, this school put forward a viewpoint opposite to the neo-classical comprehensive school, trying to restore Ricardo's tradition and establish a theoretical system based on objective axiology and centered on distribution theory on the basis of denying the neo-classical comprehensive school. On this basis, explore the formulation of new social policies, change the existing capitalist distribution system, and adjust the contradiction between unemployment and inflation. In 1970s, Keynesianism devoted itself to solving various complicated problems in capitalist society and adopted five policies: fiscal policy, monetary policy, income policy, human resource policy and social policy. Among them, the neoclassical comprehensive school emphasizes the first four kinds of policies, and the new Cambridge school emphasizes human policies and social policies, but these can only be called "second-generation Keynesianism". In the late 1960s and early 1970s, there was a serious phenomenon of stagflation in the western world. Keynesianism is criticized by the opposition school that advocates free economy because it can't explain the phenomenon and solve the stagflation problem. Keynesianism could not meet the challenges of reality and theory, got into trouble and fell from the throne of orthodox economics. In the 1980s, a new school, Neo-Keynesian Economics, emerged in western economics, which advocated * * to intervene in the economy, revived Keynesianism with unique research methods and novel theoretical viewpoints, made up for some defects of Keynesian economics, and enriched and developed modern macroeconomics. New Keynesianism does not simply follow the original Keynesianism, but criticizes, inherits and develops it. Neo-Keynesianism inherits the basic tenets of the original Keynesianism and maintains consistency in three propositions: first, there is always an excess labor supply in the labor market; Second, there are obvious cyclical fluctuations in the economy; Third, economic policy is very important in most years. In short, neo-Keynesianism inherited the basic principles of the original Keynesianism. However, there are significant differences between new Keynesianism and original Keynesianism in specific economic analysis methods and economic theory viewpoints. It is mainly reflected in the assumption that the new Keynesianism introduced the maximization of manufacturers' profits and the maximization of household utility, which was ignored by the original Keynesianism, and in the view of economic theory, it is mainly reflected in the assumption of non-market clearing. New Keynesianism replaced the original Keynesian wage rigidity hypothesis with wage and price stickiness, and added two hypotheses that were ignored by the original Keynesian model: ① the principle of maximizing economic parties (that is, manufacturers pursue profit maximization and families pursue utility maximization) and ② the rational expectation hypothesis. Neo-Keynesianism has made it clear that after the demand or supply shocks appear in the economy, the viscosity of wages and prices will make the market unable to clear, and the economy will be in an unbalanced state. Even if there are rational expectations, national economic policies will play a positive role, affecting employment and output. New Keynesianism does not simply follow the original Keynesianism, but criticizes, inherits and develops it. The development of neo-Keynesianism to the original Keynesianism is mainly reflected in the "Three Theories of Big Market", including the price stickiness theory: the price stickiness theory of neo-Keynesianism can be divided into two categories: one is the nominal price stickiness theory; But the real price stickiness theory. This provides a microeconomic basis for price theory; Labor market theory: the key assumption of new Keynesian labor market theory is wage stickiness, which can be summarized into two categories: one is nominal wage stickiness theory; But the theory of real wage stickiness; Credit rationing theory: Based on the information asymmetry of the credit market, the new Keynesian credit rationing theory discusses that the selective effect of interest rate and loan mortgage will lead to credit rationing in the credit market, the credit market will fail, and intervention will produce positive effects. Thus, it expands the research field of credit market theory and enriches and develops financial theory. Neo-Keynesianism has had a far-reaching impact on modern macroeconomics by criticizing, inheriting and developing the original Keynesianism. Mainly reflected in the following aspects. First, neo-Keynesianism further clarified the development direction of modern macroeconomics in theory and enriched the theoretical content of modern macroeconomics; Second, neo-Keynesianism can apply different schools of analytical methods in economic research, enriching the methodology of modern macroeconomics; Third, through the adjustment of policy propositions, the new Keynesianism makes the macro-economic policies face reality and pay attention to experience test. Keynesianism has been developing and changing since its birth, and finally its economic thoughts and theories have had a far-reaching impact on the study of modern economics. These theories will also affect the economic decision-making of countries and play an irreplaceable role in the economic and social development of the whole society.