Word: keynesian
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Businessmen, for their part, have come to accept that the Government should actively use its Keynesian tools to promote growth and stability. They believe that whatever happens, the Government will somehow keep the economy strong and rising. With this new confidence, they no longer worry so much about the short-term wiggles and squiggles of the economic curve but instead budget their capital spending for the long-term and thus help to prolong the expansion...
...thus giving consumers $11.5 billion more to spend and corporations $3 billion more to invest. In addition, they put through a long-overdue reduction in excise taxes, slicing $1.5 billion this year and another $1.5 billion in the year beginning Jan. 1. In an application of the Keynesian argument that an economy is likely to grow best when the government pumps in more money than it takes out, they boosted total federal spending to a record high of $121 billion and ran a deficit of more than $5 billion. Meanwhile, the Federal Reserve Board kept money easier and cheaper than...
...They Work. By and large, Keynesian public policies are working well because the private sector of the economy is making them work. Government gave business the incentive to expand, but it was private businessmen who made the decisions as to whether, when and where to do it. Washington gave consumers a stimulus to spend, but millions of ordinary Americans made the decisions?so vital to the economy ?as to how and how much to spend. For all that it has profited from the ideas of Lord Keynes, the U.S. economy is still the world's most private and most...
...Keynesian "classical" economists had thought of the government too. But almost all of them had contended that, in times of depression, the government should raise taxes and reduce spending in order to balance the budget. In the early 1930s, Keynes cried out that the only way to revive aggregate demand was for the government to cut taxes, reduce interest rates, spend heavily?and deficits be damned. Said Keynes: "The State will have to exercise a guiding influence...
...Samuelson, for example, thinks that Keynes downplayed the importance of monetary policy. His few outright critics feel that, while he knew how to buoy a depression-stricken industrial economy, he offered little in the way of practical information about how to keep a prosperous modern economy fat and secure. Keynesian theories are certainly unworkable in the underdeveloped nations, where the problem is not too little demand but insufficient supply, and where the object is not to stimulate consumption but to spur savings, form capital and raise production...