Scott Sumner points us to this interesting proof that the Keynesian economic model must be true. For the Financial Times is crowing about the fact that when government spending rises then so does GDP.

Central banks use macroeconomic models to help frame the issues that they face, to mold their ideas, and to guide them in their decisionmaking. While a wide range of models are available, economists ...

A number of economists have recently been debating what is wrong with macroeconomic modelling today. The University of Chicago's John Cochrane, Oxford’s Simon Wren-Lewis, Berkeley’s Brad DeLong, and ...

The two most prominent theories of macroeconomics to emerge during the 20 th century are the Keynesian Theory of Money and the Monetarism Theory. Keynesian thought traces back to the early part of the ...

Editor’s Note: This is Part 1 of a two-part series on how mistaken assumptions by top U.S. policymakers have worsened the financial crisis. It has been three years since the worst financial collapse ...

The income expenditure model of economics was developed by John Maynard Keynes to explain fluctuations in production of goods and services and spending. The model basically states that we produce as ...

Contrary to what has been argued by a number of critics, the aggregate demand-aggregate supply (AD-AS) framework is both internally consistent and in conformity with Keynes's own analysis. Moreover, ...

Keynesian economics is a theory that government intervention is necessary during downturns. Tax cuts are a tool in Keynesian theory to stimulate economic activity. During recessions, Keynesian ...

Keynesian economics is back. Government spending to stimulate the economy is all the rage and has won the day in Congress. Of course, conservatives are uneasy. “It’s hardly a secret that Obama is a ...

The two most prominent theories of macroeconomics to emerge during the 20 th century are the Keynesian Theory of Money and the Monetarism Theory. Keynesian thought traces back to the early part of the ...