Explain to me the theory of Keynesian economics. and why is it so widely accepted?

It's not. Keynesianism has been out of fashion since the 70s.

Keynesian economics is what guides the economic decisions of most governments today.

no clue, all I know its a concept that politicians that know as much about it as me throws around in speeches

Most people get stuck on the stimulus concept, whereas the Keynesian model also includes cooling down booms and laying reserves in the good times.
The concept of the liquidity trap played out in Japan.

can anyone just explain to me what it is?

When economy goes to shit there is lot of unused resources like unemployed people. These people would like to work but businesses see bad prospects, don't want to hire/ invest.
Keynes thinks government should ease the situation, start building infrastructure, take those unused resources and make them do something. Now there are less people unemployed, money flows, businesses see more customers, begin hiring and investing again. Government can ease the stimulus since everything is back to normal.

In reality it's very different though. And currently the stimulus is done by lowering interest rates which have been super low since 2008 crash. If you look at the interest rates we are still supposedly in the dumpster. Meanwhile there are some areas and countries that are doing exceptionally well.

I got my degree in economics. Maybe I could help you.

I dont know if its actually that easy to simplify keynes to a few basic ideas. Hes most famous for advocating stimulus spending when economies are in a recession. So, when a recession hits, productivity goes way down, but governments can step in and make things better by artificially increasing demand, either buy just spending a ton of money or to encourage more spending through more sophisticated financial means.

In my education, I remember more clearly his idea of "sticky prices", which I find more interesting. The short explanation is that in traditional economics the price is always a function of supply and demand. But in reality, people just dont think about prices that much, so they tend to get "stuck" as certain levels regardless as to what supply and demand are. The coffee shop down the street likely just picks a price and forgets about it for several years, rather than updating the price to something rational every moment of the day.

There are some other really interesting keynesian ideas, that I am finding hard to explain in a Veeky Forums post. Keynes made huge contributions to monetary theory, so its even hard distinguishing what is and isnt Keynesian exactly.

It's the fault of democracy.

Politician 1: I will fix the economy by meddling. Don't worry, I'm really smart. I know what I'm doing!

Politician 2: We cannot intervene in the free market as we only make things worse.

Who do you think the sheep elect?

>If you have no idea about economics, this book/comic explains TVE básica ideas very well
>this book/comic explains TVE básica ideas very well
>this book/comic
>comic
Fucking kek mate. What a serious academic you are.

Lowering interest rates doesn't help the unemployed, it just helps the businesses who won't hire them

>explain to me
No, explain to me why you are unable (or unwilling)
to learn Keynesian Economics on your own.

>create more jobs
>there is more production
>people have money (from the jobs)
>people buy what they've produced
>the cycle continues
It is more complex than that, and I missed some things like state intervention in the economy, tariffs, welfare plans, etc

>It doesn't.
>99% of Economists say it works (on both Political sides)

>Economy is in Depression or Contraction

>Raise Taxes and/or Government Spending
>Economy stops shrinking and starts growing

really makes you think

Why are republicans against infrastructure spending? Creates short term jobs, improves the outdated US infrastructure, in the long run the businesses and society will benefit from more efficient infrastructure.

Instead all I hear is about letting private companies create their own roads and charging people to use it

I'm disappointed in how you have no shame in blatantly posting a fucking freshman economics homework question.

> It doesn't work.
WELL LOOK AROUND YOU. FANCY THAT. SOCIETY IS WORKING.

ARE YOU?

Retard, it breaks down at some level, which is where you get a philosophical divide on international economics and state intervention on the economy.

Though I do agree it mostly works, in the modern era "labor" (workers) and jobs are considered in some form commercial commodities, with regards to outsourcing and economic immigration. Because of this, any industry with proximity to this abide by special rules, as laws of statehood suddenly change the rules of economics- but these inconsistencies trickle down to all forms of economics ultimately.

Looking from just one theory is down right dumb.

This thread doesn't belong here at all

Around the same time the economy turned to shit for the middle class, and the 1% got filthy rich.
Hmm, makes you think, doesn't it.

you mad engineering fags?

Lowering interest rates will cause more businesses to borrow money and therefore spend it, and the business bought from keeps those people's jobs.

*accumulates debt*

heh, nothin personell, white debiru.

this

leads to the booms and busts and stagnation. wouldn't you want to see growth at over 2%?

very sad growth. booms and bust cycles. so much waste in resources, malinvestments, silly stupid debt amounts. this system is not optimal.

you need a clensing of the system after people misallocate capital and businesses fail. all this stimulus results in companies who should have been weeded out long ago.

>economists can determine the market better than the market

>I am alive right now
>therefore, I will always be alive

That doesn't happen, all they will do is spend money on cheap labor and infrastructure in poor countries

Because it's a school of science that legitimizes the govervnment having more power over the economy, so thus it gets more funding from the government and it's officials and it becomes a feedback loop. It's also become a completely different beast than what it originally was.

Hell, Keynes is probably rolling in his grave at what we are doing. His plan was to run debt during economic downturns and then immediately dial back once the economy came back and run a surplus. But instead the govervnment spends more and then bitches and moans when it has to cut back and ends up never doing so.

There is nothing wrong with the boom and bust cycle inherently, in fact, constant minor growth is more dangerous.

The boom dumps a lot of capital into a sector of the economy and grows it immensely in response to demand, however this comes at a cost of poorly run, corrupt, and anti-consumer companies popping up and staying up due to the boom. As a result, the bust happens and those companies end up liquidating as consumers run away from them, those assets going towards the properly run, pro-consumer companies that are still alive and kicking during the bust.

After the dust has settled, you now have well run, innovative companies dominating that sector of the economy.

Meanwhile with constant minor growth, those corrupt companies end up staying around and spoiling the entire market with their mediocre or just plain bad products, being kept afloat by the constant growth of the economy. That is not a good solution.

Austrian economics >>> Keynsian economics by far. The Federal Reserve is one of the huge reasons why the US is fucked. Central banks in general are terrible for a country, and Keynesian economics propounds central banks

Many of the issues that have come up on this thread are a result of politics rather than Keynes's economics. see the second paragraph here for a pretty succinct summarization.

From a slightly different pwrspective, Keynes represents a massive shift in economic thought where virtually all of the classical economists and a very large number of neo-classical economists saw supply as the determinant of how an economy was doing, following Say's Law. Keynes, however, showed that aggregate demand is a very large factor (perhaps the dominant factor) behind the economy. With this theory, he advocated for government intervention - either by means such as fiscal policy (infrastructure spending or tax cuts) or monetary policy (lower interest rates) which works in the following chain: lower taxes/interest rates cause businesses to invest more ---> they hire more workers --> those workers spend their paychecks buying from other businesses ---> those businesses can hire more workers, and so on. Essentially this is the Keynesian multiplier of which the end goal is to make the economy run more smoothly. If you look at the business-cycles post-WWII it is easy to see that the economy is much, much more smooth than it was previously; whether this is due to Keynesian theory is a matter of debate but I'd argue that it is.
I would argue that Keynes has been shown to be corrent, however this requires a value judgement. Do you place emphasis on stability and employment or do you place emphasis on the 'pure' market and, you could say, stable prices. Politicians, of course, desire stability so that they may remain in office and as such, Keynes has been en vogue during/after the great recession as his theory helped move us out more quickly perhaps than the market
never thought of it this way, there is some reason in this post.
>Why are republicans against infrastructure spending?
it would require taxes to be raised on their crony friends. politics=/=economics

>Veeky Forums - Science & Math
>economics thread

OH SORRY I GUESS HE SHOULD HAVE JUST POSTED IT ON THE FUCKING ECONOMICS BOARD OH WAIT THE JEWMODS DONT WANT PEOPLE TO QUESTION LASSIEZ-FAIRE CAPITALISM. GOOD GOY. ECONOMICS ISNT SCIENCE LMFAOOOOOO

>digging holes in the ground and then burying them back down is good for economy because it boosts output and creates jobs
Yeah it totally works

>explain to me the theory of Keynesian economics.
jews need their good goyim to clean up after the mess they made.
>and why is it so widely accepted?
(((economics)))

As an extension of these posts, the cyclical nature of the economy, from boom to bust, has shaped the fortunes of most of history, while highs are usually behind the greatest moments in history, lows in the cycle are often disastrous. Keynes seeks to use fiscal policy, the only variable in the aggregate demand equation that can legitimately produce a deficit to support output. ( that old Y= C+I+G+NX you learned in basic econ). The idea being, to limit the extent to which extremes in the cycle can perpetuate run away events beyond the control of normal fiscal and monetary tools. Keynesians never sought to whole replace the classical model, it seeks to improve upon it, classical economics still seems to hold up in the long run, where as Keynes' ideas make up for its failures in explaining short run dilemmas.

Its easy to mix politics in here, and mostly for good reason, however even conservatives are aware of the impact of fiscal policy in economic downturns, the wall street bailout happened on bush's watch, and while some republicans may have voted against the stimulus, if the ball was really in their court they would have done the same thing as democrats.

>explain to me
>bcoz I can't into Google or Wiki
>and I can't homewerk
explain to me why you are so faggot

...

I am frustrated by the unrelenting memetic fixation on Keynesianism versus von Misesness. It comes at the expense of simply discussing modern financial data in the language of the big data analytics.

Capitalist markets will never work

That's why capitalist countries like USA Europe and Japan are dirt poor but socialist countries and ex socialist countries like Ukraine and North Korea are thriving.

people never agree on a common definition for "capitalist markets." People who don't like them define them in bad way and people who do like them define them in a good way. If we remove the "capitalism" and focus on what people do in the market instead then the better-reasoned market analysis would lead to superior market performances achieving more widely equitable valleys of market stability. The abstract "capitalist market" can and often is a distraction from the pathology of the real market.

where can i download stock data?
preferably at fast (5-10 minute) intervals over a long period of time?

>brainlets arguing over which price system is the least terrible

Ukraine and North Korea don't have market economies. Reminder that capitalist economies like the USA and China are destroying life at an unsustainible rate, changing the climate and it's literally the end. Of course industrialization is not inherent to capitalism, but comand economies focused on profits are like the state capitalism of China or the corporate state of the USA. Pic related. Economic colonialism through market liberalization has completley destoryed the small pockets of hope in the world like the Amazon Southeast Asia and subsaharan Africa, most unfortunately the ocean.
Capitalism isn't about money which is just a value, you can have money in anarchism or communism too and much more besides capitalism. Capital is something that can be capitalized like land you never touch, someone else's labour, harming other people in any number of nasty ways, debt,ect, literally anything. You would know more about what an economy is if you weren't completley brainwashed by the media, this post Is correct.

See

Let me point out that ignoring exactly what capitalism is and the rules that govern it is abstracting a system to analyze while ignoring the concrete

correlation=/=causation you brainlet

Name a geographic area

antarctica

Look at what rising sea tempatures are doing to the Ross sea, it's everywhere , it's pervasive and it's because we value capital instead of actual objects