Keynesians

Keynesians are economists who subscribe to Keynesian economics, a school of macroeconomic thought that emphasizes the role of aggregate demand in determining output and employment in the short run. Originating with John Maynard Keynes and his The General Theory of Employment, Interest and Money (1936), Keynesians argue that economies can settle at less than full employment because demand can be insufficient to purchase all that is produced, and because prices and wages adjust slowly.

They advocate active stabilization policies to manage aggregate demand, especially fiscal policy such as government spending, investment, and taxes, to reduce unemployment and smooth business cycles. Monetary policy is also relevant but may be limited by phenomena like liquidity traps when interest rates approach zero. The Keynesian framework commonly uses the concept of the multiplier, whereby a change in autonomous spending can lead to a larger change in national income, and it often assumes some stickiness of prices and wages that hinders automatic stabilization.

Keynesians emphasize countercyclical policy and government deficits during downturns as appropriate medicine, while acknowledging concerns about inflation and debt in the long run. The school has evolved into the mid-20th-century Keynesian synthesis and, in later decades, New Keynesian economics, which seeks to ground Keynesian ideas in microeconomic foundations and rational expectations. The term "Keynesians" is therefore used for policymakers and theorists who stress demand management, in contrast to classical or monetarist views that emphasize supply and long-run neutrality of debt.

Historically, Keynesian ideas shaped macroeconomic policy in many economies after the Great Depression and through the mid-20th century, influencing fiscal and monetary frameworks and policy debates that continue in various forms today.