John Maynard Keynes, 1st
Baron Keynes,[1]CB, FBA (/
ˈkeɪnz/ kaynz; 5 June 1883 21
April 1946) was a British
economist whose ideas have
fundamentally affected the
theory and practice of modern
macroeconomics, and informed
the economic policies of
governments. He built on and
greatly refined earlier work on
the causes of business cycles,
and is widely considered to be
one of the founders of modern
macroeconomics and the most
influential economist of the 20th
century.[2][3][4][5] His ideas are
the basis for the school of
thought known as Keynesian
economics, and its various
offshoots.
In the 1930s, Keynes
spearheaded a revolution in
economic thinking, overturning
the older ideas of neoclassical
economics that held that free
markets would, in the short to
medium term, automatically
provide full employment, as long
as workers were flexible in their
wage demands. Keynes instead
argued that aggregate demand
determined the overall level of
economic activity, and that
inadequate aggregate demand
could lead to prolonged periods
of high unemployment.
According to Keynesian
economics, state intervention
was necessary to moderate
"boom and bust" cycles of
economic activity.[6] He
advocated the use of fiscal and
monetary measures to mitigate
the adverse effects of economic
recessions and depressions.
Following the outbreak of the
Second World War, Keynes's
ideas concerning economic
policy were adopted by leading
Western economies. In 1942,
Keynes was awarded a
hereditary peerage as Baron
Keynes of Tilton in the County of
Sussex.[7] Keynes died in 1946,
but during the 1950s and 1960s
the success of Keynesian
economics resulted in almost all
capitalist governments adopting
its policy recommendations.