Keynesian model
The Keynesian model is an economic theory developed by John Maynard Keynes during the 1930s. It emphasizes the role of government intervention in stabilizing the economy, particularly during periods of recession. According to this model, increased government spending can boost demand, leading to higher production and employment.
In the Keynesian model, aggregate demand is seen as the primary driver of economic growth. It suggests that when consumers and businesses reduce spending, the government should step in to stimulate the economy. This approach contrasts with classical economics, which emphasizes self-regulating markets and minimal government involvement.