This section summarizes basic Keynesian macro theory and presents a dialog between Keynesian perspectives and common criticisms raised about these ideas. We encourage all of our readers to review these pages; they provide the foundation upon which we build the Muddy Water Macro (MWM) perspective on current issues facing the U.S. and world economies.

Very briefly, the Keynesian-MWM perspective is that insufficient spending–low demand for goods and services–causes unemployment in modern economies most of the time, but especially in recessions and periods of stagnant growth. Private actions and government policies that stimulate demand can often raise output and production, and lower unemployment.

To get started we encourage you to first read our page on Demand, Supply, and Unemployment (also accessible from the menu on the right).