What is Keynesian theory in economics?

Keynesian economics is considered a “demand-side” theory that focuses on changes in the economy. During the 1930s in an attempt to understand the Great Depression, the British economist John Maynard Keynes developed Keynesian theory in economics. You can read about the Monetary System – Types of Monetary System (Commodity, Commodity-Based, Fiat Money) in the given link.

Keynesian economics is a macroeconomic theory of total spending in the economy and its effects on inflation, employment, and output.

Further readings:

  1. Inflation in Economy- Types of Inflation, Inflation Remedies [UPSC Notes]
  2. Indian Economy Notes For UPSC Exam [Download PDFs]

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