What Has Become of Keynesian Economics?

Abstract

To see what has become of Keynesian economics in the twenty-first century, this essay looks at three of the different ways in which the work of John Maynard Keynes (1883-1946) revolutionized economics: economic theory, economic policy and economic ethics. Although Keynes encouraged the production of many variations on his basic model, we can clearly identify what Keynesian economics is. Following the global financial crisis of ten years ago, there have been two waves of Keynesian economic policy: first, fiscal stimulus packages designed to help avoid another Great Depression and, more recently, a second, smaller wave to address the damage done by the austerity policies that followed upon the stimulus packages enacted in 2008-09. While Keynesian economic policies are once again being applied in many countries, revealing that there is indeed a Keynesian ethic, little work is being done to develop fresh Keynesian economic theories.