John Maynard Keynes

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John Maynard Keynes

A major British economist. He provided much of the intellectual foundation for the theory that government intervention is necessary to ensure an active and vibrant economy. According to this theory, government should stimulate demand for goods and services in order to encourage economic growth. It thus recommends tax cuts and increased government spending during recessions to reinvigorate growth; likewise, it recommends tax increases and spending cuts during economic expansion in order to combat inflation. His thought was extremely popular for much of the 20th century prior to the 1970s, when stagflation (which under Keynesian theory should not be possible) was prevalent in the UK and the US. However, Keynesianism resurged at the end of the first decade of the 2000s. Keynes lived from 1883 to 1946.