What is Keynesian policy?

Keynesianism, or Keynesian economics, is an economic theory based on the ideas of Keynes's work "The General Theory of Employment, Interest and Money" (Keynes, 1936), which advocates that the country adopts expansionary policies. Sexual economic policies promote economic growth by increasing demand.

Keynes’s economic theory believes that macroeconomic trends will restrict specific behaviors of individuals. "Political economy" or "economics" since the late 18th century has been based on the continuous development of production to increase economic output, and Keynes believed that the reduction in total demand for goods was the main cause of economic recession.

Based on this, he believes that measures to maintain a balanced overall economic activity data can balance supply and demand at a macro level. Therefore, Keynes's and other economic theories based on Keynes' theory are called macroeconomics to distinguish them from microeconomics, which focuses on the study of individual behavior.

Extended information:

Keynes believed that the level of production and employment is determined by the level of aggregate demand. Aggregate demand is the total demand for goods and services in the entire economic system. In microeconomic theory, automatic adjustments in prices, wages, and interest rates automatically move aggregate demand toward the level of full employment.

Keynes pointed out the reality of the rapid deterioration of production and employment conditions at that time, and pointed out that no matter how good the theory was, in fact the automatic adjustment mechanism did not work. The key to the problem is whether "insufficient demand" exists.

The reason why Keynes summarized and integrated a large number of macro concepts from a macro perspective made the development of economics begin to break away from the limitations of price analysis, thus opening a new page in Western economics in the 20th century. , because when capitalism develops to the monopoly stage, there is an urgent need for a new perspective and a new theory to explain and make up for the shortcomings of decadent liberal capitalism.

Baidu Encyclopedia-Keynesianism