Key Ideas of Keynesianism, Historical Context, and Contemporary Influence

Анотація

Introduction. In 1936, John Maynard Keynes published his work “The General Theory of Employment, Interest and Money”, which was a response to the challenges of the Great Depression. Classical and neoclassical theories, which advocated minimal government intervention, proved to be unable to explain the global crisis. Keynes' theory offered a new approach to the analysis of economic processes, causing widespread resonance and discussion among scientists. Modern scientists also discuss the relevance of Keynesian theory in the 21st century, analyzing its application in the context of globalization and financial crises. Keynesian theory gave impetus to the development of mathematical modeling in economics at the national and regional level, as the need for quantitative analysis and short-run forecasting of economic processes led to the emergence of models by V. Leontief and M. Mikhalevich. The purpose of the article is to analyze John Maynard Keynes' revolutionary economic theory, set forth in his work “The General Theory of Employment, Interest, and Money,” with a particular emphasis on its significance for understanding the causes of the Great Depression, the role of effective demand, the macroeconomic interdependence of markets, psychological factors in the economy, as well as the integration of Keynesian ideas with mathematical modeling of the economy – from Leontief's “input-output” models to M.V. Mikhalevich's optimization developments – and their influence on contemporary economic approaches and governmental economic policy. Results. The key concepts of J. M. Keynes' economic theory, set out in his work “The General Theory of Employment, Interest and Money,” are analyzed. The evolution of economic ideas from classical and neoclassical to Keynesianism is examined. The integration of Keynesian approaches with methods of mathematical modeling in economics based on the models of V. Leontief and M. Mikhalevich is considered. Keywords: Keynesian economics, Keynes' psychological law, multiplicator, aggregated macroeconomics indicators, mathematical modeling in economics, optimization models by M. Mikhalevich.

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