Economics, Keynesian

65 no. 1 (My 1998): 1–19.

Keynesian economics has reference to a set of theoretical explanations for persistent unemployment and to specific governmental employment policies. The general notion behind Keynesian economics is that persistent unemployment derives from decreases in total private sector spending. According to Keynesian economists, the government can alleviate unemployment by increasing the total amount of spending in the economy.

Keynesian economic policy began during the European Great Depression. Some economists blamed the Great Depression on private spending. The German economist Wilhelm Lautenbach published a spending theory of unemployment in 1929, and the Nazi government acted in accordance with this theory by increasing spending on public projects and on the military. One of Keynes's associates, Joan Robinson, remarked that “Hitler found a cure against unemployment ...