, Columnist
Even Trump Is a Keynesian
Opponents claimed fiscal stimulus did nothing. Not only does the data say otherwise, but no one listened to them anyway.
What does the election of Donald Trump mean for macroeconomics? Above all else, it means that the half-century-long challenge to Keynesian ideas is over. The insurgents lost.
First, some background. During the Great Depression, John Maynard Keynes suggested that government spending would boost the economy, by increasing aggregate demand. In a recession, there are unused resources -- empty offices, idle factories and unemployed people sitting around at home. This obviously means an economy is producing less than it could; if someone just took the unemployed people and put them in the empty offices, output would go up.