An influential British economist whose theories, known as Keynesian economics, revolutionized macroeconomics and advocated for government intervention to manage economic downturns.
The total demand for final goods and services in an economy at a given time. Keynes argued that a lack of aggregate demand was the primary cause of the Great Depression.
The economic theory that while individual saving is a virtue, if everyone in an economy saves more during a recession, it will reduce overall demand and actually make the downturn worse.
The core Keynesian idea that the government should actively use fiscal and monetary policy to manage the economy, rather than letting market forces work on their own.
The use of government spending and taxation to influence the economy.
Actions undertaken by a central bank to manipulate the money supply and credit conditions.
A monetary system where a country's currency is linked to a fixed quantity of gold. Keynes was a famous critic of this system.
A Scottish philosopher and economist, author of The Wealth of Nations (1776), and widely considered the father of modern, classical economics.
The specialization of work into specific, repeatable tasks, which Smith identified as a key driver of increased productivity.
The dominant economic theory in Europe from the 16th to 18th centuries, which promoted government regulation of a nation's economy to augment state power at the expense of rival national powers.
Economic systems in which prices and the allocation of resources are determined primarily by supply and demand, with minimal government intervention.
A metaphor used by Adam Smith to describe the unintended social benefits of an individual's self-interested actions in a free market.
Goods or services that are non-excludable and non-rivalrous, which the private market may not adequately provide (e.g., national defense, infrastructure).
An economic policy that does not restrict imports or exports between countries.
A German philosopher and economist whose 1867 work, Das Kapital, provided the foundational critique of capitalism and the theoretical basis for communism.
The central Marxist concept of a conflict between the owners of capital (bourgeoisie) and the working class (proletariat).
The theory that the economic value of a good or service is determined by the total amount of socially necessary labor required to produce it.
The Marxist theory that a society's economic organization (its "mode of production") fundamentally determines its social, political, and ideological structure.
A political and economic ideology that aims to create a classless society in which the means of production are owned and controlled by the public.
The unequal distribution of assets and income within a society, which Marx believed would inevitably worsen under capitalism.
An American economist who was a leading figure of the Chicago School of economics. He was a powerful advocate for free markets and developed the theory of Monetarism.
A debilitating economic condition of slow economic growth and high unemployment (stagnation) combined with rising prices (inflation). The stagflation of the 1970s created a crisis for Keynesian economics.
The economic theory that the money supply is the most important driver of economic activity. Monetarists argue that central banks should focus solely on controlling the money supply to maintain price stability.
The total amount of money in circulation in an economy.
A general increase in prices and fall in the purchasing value of money.
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