What new economic viewpoint was advanced by John Maynard Keynes in the 1930s?

John Maynard Keynes developed an economic theory that became known as Keynesian economics. His theory states that the government must get involved in the economy when the economy slumps. He believed that without government intervention, a recession or depression could last a long time, as people would be hesitant to spend money and businesses would be hesitant to invest money. He believed that the demand from consumers, the government, and businesses is the most important aspect of an economy. Since the economy has no way to correct itself if full employment does not exist, the government must step in by promoting policies that will stimulate demand and will help create full employment. The government could cut taxes to encourage more spending by consumers and more investment from businesses, or the government could spend more money through the practice of deficit spending. These actions should lead to increased demand for products, which should help stimulate economic growth and provide more jobs.
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