According to Keynesian theory, as demand increases, employment, income, and economic output should also increase. On the flip side, insufficient demand can lead to recessions and high unemployment.

existing economic theory was unable either to explain the causes of the severe worldwide economic collapse or to provide an adequate public policy solution to jump-start production and employment.

Keynesian economics comes from economist John Maynard Keynes, author of the 1936 book "The General Theory of Employment, Interest and Money." Keynes believed the government could manage demand to ...