The main differences between Keynesianism and traditional economic theory

Keynesianism is an economic theory based on Keynes's book "General Theory of Employment, Interest and Money" (Keynes, 1936), which advocates that countries adopt expansionary economic policies and promote economic growth by increasing demand. Keynesianism believes that macroeconomic trends will restrict the specific behavior of individuals. /kloc-since the late 8th century, "political economics" or "economics" has been based on the continuous development of production to increase economic output, and Keynes believed that the reduction of total demand for goods was the main reason for economic recession. From this perspective, he believes that measures to maintain the data balance of overall economic activities can balance supply and demand at the macro level. Therefore, Keynes and other economic theories based on Keynesian theory are called macroeconomics, which is different from microeconomics that focuses on individual behavior.

The main conclusion of Keynesianism is that there is no powerful automatic mechanism for the development of production and employment to full employment in the economy. This is contrary to the so-called Say's law in neoclassical economics, which holds that the automatic adjustment of prices and interest rates will tend to create full employment. The attempt to link macroeconomics with microeconomics has become the most fruitful economic research field after Keynes's General Theory. On the one hand, microeconomics tries to find the macro expression of its thoughts, on the other hand, taking monetarism and Keynesian economists as examples, it tries to find a solid micro foundation for Keynesian economic theory. After World War II, this trend developed into a comprehensive school of neoclassicism.

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