Keynesian Economics (jan 27, 1936 – 22h 33min, jul 21, 2026 y)

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Developed by John Maynard Keynes in the 1930s, this model of Keynesian economics attempted to explain and provide direction in regulating the natural boom and bust cycle of the economy, also known as the ebb and flow cycle. Keynes’ fiscal policies called for government intervention during boom periods by increasing taxes to cut consumer spending, and increasing government output to encourage consumer purchases during times of economic recession. This theory was all based on the belief that aggregate demand was the most important driving force in an economy, with aggregate demand defined as the total amount of spending by citizens, the government, and businesses. Since aggregate demand is controlled by both public and private sectors, Keynesian economics supported a mixed economy – a generally private economy reliant on natural supply and demand (demand-side economics) and moderated by the government, hovering at slightly left of the centre of the economic spectrum. Both John Maynard Keynes and John Stuart Mill influenced President Roosevelt in the making of the New Deal, aiding in the shift towards modern liberalism and minimizing income disparity.

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