KEYNESIAN ECONOMICS IN TIMES OF CRISIS: LESSONS FOR TODAY'S POLICY MAKERS

Abstract

This paper explores the significant contributions of John Maynard Keynes to political economic thought, particularly his role in shaping Keynesian economics as a response to classical economic theories that advocated for minimal government intervention. It highlights Keynes's emphasis on active government involvement in promoting full employment, social welfare, and economic stability, particularly during periods of recession. By introducing concepts such as deficit spending and the importance of aggregate demand, Keynes challenged the prevailing notions of self-regulating markets. The analysis also critically examines the limitations of Keynesian doctrines, including concerns about inflation, public debt, and the short-term focus of his policies. In response, the research offers recommendations to enhance the applicability of Keynesian principles in contemporary society. These recommendations include integrating supply-side perspectives, adopting sustainable fiscal policies, addressing income inequality, and fostering public-private partnerships to stimulate innovation and economic growth. Through this exploration, the study argues for a balanced approach that combines Keynesian insights with modern economic realities, ensuring that Keynesian economics remains a relevant and effective framework for addressing today’s complex economic challenges.