John Maynard Keynes

John Maynard Keynes, 1st Baron Keynes[3] CB, FBA (/keɪnz/ KAYNZ; 5 June 1883 – 21 April 1946) was a British economist and philosopher whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments. Originally trained in mathematics, he built on and greatly refined earlier work on the causes of business cycles.[4] One of the most influential economists of the 20th century,[5][6][7] he produced writings that are the basis for the school of thought known as Keynesian economics, and its various offshoots.[8] His ideas, reformulated as New Keynesianism, are fundamental to mainstream macroeconomics. He is known as the "father of macroeconomics".[9][10]

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The Right Honourable The Lord Keynes CB FBA
Keynes in 1933
Born	(1883-06-05)5 June 1883 Cambridge, England
Died	21 April 1946(1946-04-21) (aged 62) Tilton, near Firle in Sussex, England
Education	Eton College King's College, Cambridge
Political party	Liberal
Spouse	Lydia Lopokova ​ (m. 1925)​
Parents	John Neville Keynes (father) Florence Ada Brown (mother)
Academic career
Institution	King's College, Cambridge
Field	Political economy Probability
School or tradition	Keynesian economics
Influences	Bentham Burke Johannsen Keynes Sr Malthus Marshall Newton Wicksell Russell[1] G. E. Moore[2] Sraffa
Contributions	Macroeconomics Keynesian economics Liquidity preference Spending multiplier AD–AS model Demand-side economics

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Macroeconomics
Basic concepts Aggregate demand Aggregate supply Business cycle Deflation Demand shock Disinflation Effective demand Expectations Adaptive Rational Financial crisis Growth Inflation Demand-pull Cost-push Interest rate Investment Liquidity trap Measures of national income and output GDP GNI NNI Microfoundations Money Endogenous Money creation Demand for money Liquidity preference Money supply National accounts SNA Nominal rigidity Price level Recession Shrinkflation Stagflation Supply shock Saving Unemployment
Policies Fiscal Monetary Commercial Central bank Universal basic income
Models IS–LM AD–AS Keynesian cross Multiplier Accelerator Phillips curve Arrow–Debreu Harrod–Domar Solow–Swan Ramsey–Cass–Koopmans Overlapping generations General equilibrium DSGE Endogenous growth Matching theory Mundell–Fleming Overshooting NAIRU
Related fields Econometrics Economic statistics Monetary economics Development economics International economics
Schools Mainstream Keynesian Neo- New Monetarism New classical Real business-cycle theory Stockholm Supply-side New neoclassical synthesis Saltwater and freshwater Heterodox Austrian Chartalism Modern monetary theory Ecological Post-Keynesian Circuitism Disequilibrium Marxian Market monetarism
People François Quesnay Adam Smith Thomas Robert Malthus Karl Marx Léon Walras Knut Wicksell Irving Fisher Wesley Clair Mitchell John Maynard Keynes Alvin Hansen Michał Kalecki Gunnar Myrdal Simon Kuznets Joan Robinson Friedrich Hayek John Hicks Richard Stone Hyman Minsky Milton Friedman Paul Samuelson Lawrence Klein Edmund Phelps Robert Lucas Jr. Edward C. Prescott Peter Diamond William Nordhaus Joseph Stiglitz Thomas J. Sargent Paul Krugman N. Gregory Mankiw
See also Macroeconomic model Publications in macroeconomics Economics Applied Microeconomics Political economy Mathematical economics
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In 1902, Keynes gained admittance to the competitive mathematics programme at King's College at the University of Cambridge. During the Great Depression of the 1930s, Keynes spearheaded a revolution in economic thinking, challenging the 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. He argued that aggregate demand (total spending in the economy) determined the overall level of economic activity, and that inadequate aggregate demand could lead to prolonged periods of high unemployment, and since wages and labour costs are rigid downwards the economy will not automatically rebound to full employment.[11] Keynes advocated the use of fiscal and monetary policies to mitigate the adverse effects of economic recessions and depressions. He detailed these ideas in his magnum opus, The General Theory of Employment, Interest and Money, published in late 1936. By the late 1930s, leading Western economies had begun adopting Keynes's policy recommendations. Almost all capitalist governments had done so by the end of the two decades following Keynes's death in 1946. As a leader of the British delegation, Keynes participated in the design of the international economic institutions established after the end of World War II but was overruled by the American delegation on several aspects.

Keynes's influence started to wane in the 1970s, partly as a result of the stagflation that plagued the Anglo-American economies during that decade, and partly because of criticism of Keynesian policies by Milton Friedman and other monetarists,[12] who disputed the ability of government to favourably regulate the business cycle with fiscal policy.[13] The advent of the global financial crisis of 2007–2008 sparked a resurgence in Keynesian thought. Keynesian economics provided the theoretical underpinning for economic policies undertaken in response to the financial crisis of 2007–2008 by President Barack Obama of the United States, Prime Minister Gordon Brown of the United Kingdom, and other heads of governments.[14]

When Time magazine included Keynes among its Most Important People of the Century in 1999, it reported that "his radical idea that governments should spend money they don't have may have saved capitalism".[15] The Economist has described Keynes as "Britain's most famous 20th-century economist".[16] In addition to being an economist, Keynes was also a civil servant, a director of the Bank of England, and a part of the Bloomsbury Group of intellectuals.[17]