Keynesian economics stands as the most influential economic formulation of the 20th cent., though its ascendency was vigorously challenged by monetarism in the late 20th cent. His theories were widely revived during the economic crisis of 2008–9. Keynes's ideas have appealed to both practical politicians and theoretical economists with equal force, perhaps because he was a steadfast pragmatist, attacking the real problems of national employment and income while still remaining faithful to the requirements of rigorous economic thought. Although he favored controlled investment and an active public sector, he never wavered in his faith in the capitalist market economy. In Keynesian theory, government action is designed to stimulate the market, not to eliminate it.
The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012, Columbia University Press. All rights reserved.