2008–09 Keynesian resurgence

2008–2009 Keynesian resurgenceKeynesian resurgenceresurgence in Keynesian thought2008-09 Keynesian resurgencefiscal stimulusglobal efforts to increase demandgovernment led responseKeynesian economic ideasKeynesian revival of 2008resurgence in Keynesian economic thought
Following the global financial crisis of 2007–08, there was a worldwide resurgence of interest in Keynesian economics among prominent economists and policy makers.wikipedia
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John Maynard Keynes

KeynesMaynard KeynesJ. M. Keynes
This included discussions and implementation of economic policies in accordance with the recommendations made by John Maynard Keynes in response to the Great Depression of the 1930s—most especially fiscal stimulus and expansionary monetary policy.
However, the advent of the global financial crisis of 2007–2008 sparked a resurgence in Keynesian thought.

Keynesian economics

KeynesianKeynesianismKeynesian theory
From the end of the Great Depression until the early 1970s, Keynesian economics provided the main inspiration for economic policy makers in Western industrialized countries. For more detail on specific systems of thought relevant to debate on this fiscal policy see Keynesian economics, Monetarism, the Austrian School, New classical macroeconomics, Real business-cycle theory, and New Keynesian economics.
The advent of the financial crisis of 2007–08 caused a resurgence in Keynesian thought, which continues as new Keynesian economics.

Washington Consensus

macroeconomic adjustmentneoliberal agendaneoliberal policy
The Washington Consensus view that current account imbalances do not matter continued even in the face of a ballooning US deficit, with mainstream academic opinion only turning to the view that the imbalances are unsustainable by 2007. In his 2009 book Keynes: The Return of the Master, economic historian Lord Skidelsky has a chapter comparing the performance of the world economy between the "golden age" period of 1951–73, when Keynesian policies were dominant, with the Washington Consensus period of 1981–2008, when free market policies were adopted by leading governments.
Following the strong intervention undertaken by governments in response to market failures, a number of journalists, politicians and senior officials from global institutions such as the World Bank began saying that the Washington Consensus was dead.

Keynesian Revolution

a revolution in economic thinking
Before the Keynesian Revolution that followed Keynes's 1936 publication of his General Theory, the prevailing orthodoxy was that the economy would naturally establish full employment.
The financial crisis of 2007–08 saw a resurgence of interest in Keynesian economics, the 2008–09 Keynesian resurgence.

Financial crisis of 2007–08

financial crisis of 2007–2008global financial crisis2008 financial crisis
Following the global financial crisis of 2007–08, there was a worldwide resurgence of interest in Keynesian economics among prominent economists and policy makers.

Martin Wolf

Wolf, MartinMartin H. WolfMartin Harry Wolf
In March 2008, leading free-market journalist Martin Wolf, chief economics commentator at the Financial Times, announced the death of the dream of global free-market capitalism, and quoted Josef Ackermann, chief executive of Deutsche Bank, as saying "I no longer believe in the market's self-healing power."
He became one of the more influential drivers of the 2008–2009 Keynesian resurgence, and in late 2008 and early 2009, he used his platform on the Financial Times to advocate a massive fiscal and monetary response to the financial crisis of 2007–2010.

Capital control

capital controlscapitalcapital account controls
* Capital controls.
By 2009, the global financial crisis had caused a resurgence in Keynesian thought which reversed the previously prevailing orthodoxy.

New Keynesian economics

New KeynesianNew Keynesian macroeconomicsNew Keynesians
For more detail on specific systems of thought relevant to debate on this fiscal policy see Keynesian economics, Monetarism, the Austrian School, New classical macroeconomics, Real business-cycle theory, and New Keynesian economics.

Donald Markwell

Markwell, DonaldProfessor Don MarkwellDonald John Markwell
Donald Markwell and others argued that the absence of an effective international approach in the spirit of Keynes would risk a return of economic causes of international conflict, which Keynes had identified back in the 1930s.
John Maynard Keynes and International Relations: Economic Paths to War and Peace was widely cited in the Keynesian revival of 2008 for its emphasis on international economic cooperation (including the international coordination of economic policies, and the development of international economic institutions such as the International Monetary Fund and World Bank).

Paul Krugman

Paul R. KrugmanKrugmanKrugman, P.
In a widely syndicated article published in August 2009, Paul Krugman announced that the world had been saved from the threat of a second great depression, thanks to "Big Government".
Krugman was one of the most prominent advocates of the 2008–2009 Keynesian resurgence, so much so that economics commentator Noah Smith referred to it as the "Krugman insurgency."

James K. Galbraith

James GalbraithGalbraithJames K Galbraith
Macro economist James K. Galbraith used the 25th Annual Milton Friedman Distinguished Lecture to launch a sweeping attack against the consensus for monetarist economics and argued that Keynesian economics were far more relevant for tackling the emerging crises.
Towards the end of 2008 policy makers around the world began acting in line with Galbraith’s recommendations, as part of the Keynesian resurgence described by the Financial Times as "a stunning reversal of the orthodoxy of the past several decades".

Balance of payments

balance of paymentbalance-of-paymentsaccount balance
* Global trade imbalances.
While there have been warnings of future cuts in public spending, deficit countries on the whole did not make these in 2009, in fact the opposite happened with increased public spending contributing to recovery as part of global efforts to increase demand.

Robert J. Shiller

Robert ShillerBob ShillerShiller
Shortly afterward economist Robert J. Shiller began advocating robust government intervention to tackle the financial crisis, citing Keynes.

Robert Zoellick

Robert B. ZoellickZoellick
World Bank's President Robert Zoellick advocated that all developed countries pledge 0.7 percent of their stimulus package to a vulnerability fund for assisting developing countries.

Volcker Rule

The Volcker RuleVolcker
On 21 January 21, 2010, the Volcker Rule was endorsed by President Obama.

Keynes: The Return of the Master

book
In his 2009 book Keynes: The Return of the Master, economic historian Lord Skidelsky has a chapter comparing the performance of the world economy between the "golden age" period of 1951–73, when Keynesian policies were dominant, with the Washington Consensus period of 1981–2008, when free market policies were adopted by leading governments.

Animal Spirits (book)

Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global CapitalismAnimal SpiritsAnimal Spirits'' (book)
In February 2009, Robert Shiller and George Akerlof argued in their book [[Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism|Animal Spirits]] that the current US stimulus package was too small, because it did not take into account loss of confidence or do enough to restore the availability of credit.

Great Depression

DepressionThe Great DepressionDepression era
This included discussions and implementation of economic policies in accordance with the recommendations made by John Maynard Keynes in response to the Great Depression of the 1930s—most especially fiscal stimulus and expansionary monetary policy.

Stimulus (economics)

economic stimulusfiscal stimulusstimulus
This included discussions and implementation of economic policies in accordance with the recommendations made by John Maynard Keynes in response to the Great Depression of the 1930s—most especially fiscal stimulus and expansionary monetary policy.

Stagflation

high unemployment and inflationeconomic downturnglobal inflation
The influence of Keynes's theories waned in the 1970s, due to stagflation and critiques from Friedrich Hayek, Milton Friedman, Robert Lucas, Jr. and other economists, who were less optimistic about the ability of interventionist government policy to positively regulate the economy or otherwise opposed to Keynesian policies.

Friedrich Hayek

Friedrich von HayekF. A. HayekF.A. Hayek
The influence of Keynes's theories waned in the 1970s, due to stagflation and critiques from Friedrich Hayek, Milton Friedman, Robert Lucas, Jr. and other economists, who were less optimistic about the ability of interventionist government policy to positively regulate the economy or otherwise opposed to Keynesian policies.

Milton Friedman

FriedmanFriedman, MiltonMilton
The influence of Keynes's theories waned in the 1970s, due to stagflation and critiques from Friedrich Hayek, Milton Friedman, Robert Lucas, Jr. and other economists, who were less optimistic about the ability of interventionist government policy to positively regulate the economy or otherwise opposed to Keynesian policies.

Robert Lucas Jr.

Robert Lucas, Jr.Robert LucasRobert E. Lucas
The influence of Keynes's theories waned in the 1970s, due to stagflation and critiques from Friedrich Hayek, Milton Friedman, Robert Lucas, Jr. and other economists, who were less optimistic about the ability of interventionist government policy to positively regulate the economy or otherwise opposed to Keynesian policies.

Monetary policy

monetarymonetary policiesexpansionary monetary policy
This included discussions and implementation of economic policies in accordance with the recommendations made by John Maynard Keynes in response to the Great Depression of the 1930s—most especially fiscal stimulus and expansionary monetary policy.

The General Theory of Employment, Interest and Money

General TheoryGeneral Theory of Employment, Interest and MoneyThe General Theory
Before the Keynesian Revolution that followed Keynes's 1936 publication of his General Theory, the prevailing orthodoxy was that the economy would naturally establish full employment.