John Maynard Keynes is widely recognized as the inventor of Keynesian theory.
Keynes was a British economist who revolutionized economic thought with his groundbreaking book The General Theory of Employment, Interest and Money, published in 1936. This book laid the foundation for Keynesian economics, a school of thought that emphasizes the role of government intervention in managing the economy, especially during periods of recession.
Key tenets of Keynesian theory include:
- Government spending: Keynesian theory argues that governments should increase spending during economic downturns to stimulate demand and create jobs. This is often referred to as "fiscal policy."
- Monetary policy: Keynesian theory also advocates for the use of monetary policy, such as lowering interest rates, to encourage borrowing and investment.
- Demand-side economics: Keynesian theory focuses on the demand side of the economy, arguing that increased demand leads to increased production and employment.
