Keynesian Thought

Keynesian Thought

by Luke Metzler -
Number of replies: 1

Let's say that America followed the Keynesian theory flawlessly and always used the government to intervene when a recession was taking place. How often would the secondary effects build up every time the government would constantly spend? It seems like different factors would take place depending on the state of the economy at that moment.

In reply to Luke Metzler

Re: Keynesian Thought

by Danny Weaver -
Clarify this question in class if you like. The government always uses spending to intervene in an economy. The argument from classical economists is that government spending slows the growth out of the recession via the crowding out theory. This argument is a counterfactual, but the theory makes sense a priori.
Accessibility

Background Colour Background Colour

Font Face Font Face

Font Kerning Font Kerning

Font Size Font Size

1

Image Visibility Image Visibility

Letter Spacing Letter Spacing

0

Line Height Line Height

1.2

Link Highlight Link Highlight

Text Colour Text Colour