Keynesian

1) influenced by the economic theory of John M. Keynes (1883-1946); in particular, Keynes' book *The General Theory of Employment, Interest, and Money* (1936). The main point of Keynes' general theory (GT) was that market economies are not usually self-correcting, and occasionally require some sovereign intervention to prevent inflation or depression. One of the policy prescriptions of the GT for curing recessions was to lower interest rates; another, more potent tool, was to deliberately run a fiscal deficit as a strategy for increasing aggregate demand. The GT was too late to have much of an impact on the Great Depression, but it did have a major impact on the economic policies of the Western Democracies from 1946 to the present. During the period 1979 to 2001, Keynesianism was supposedly discredited, but national governments continued to use stimulus packages and monetary policy to resolve recessions. The policy has evolved, but remains the cornerstone of actually existing government behavior. Attacks on Keynesianism: the most famous adversary of the GT was Friedrich von Hayek (1899-