<p>Keynesian economics is <a href="https://www.investopedia.com/terms/k/keynesianeconomics.asp" rel="nofollow noreferrer">defined</a> as:</p>
<blockquote>
<p>increased government expenditures and lower taxes to stimulate demand and pull the global economy out of the depression.</p>
</blockquote>
<p>Do all modern economies adopt a Keynesian fiscal stance during significant economic downturns? Or have some demonstrated that they will not increase government spending at all during downturns?</p>
<p>Notes:</p>
<ul>
<li><p>To make the question less ambiguous, please assume a country is 'Keynesian' if government spending was intentionally increased by at least 2.5% during a downturn of at least 1% at any point in the last 50 years (and 'somewhat Keynesian' if government spending increased by 1.5% during a downturn of at least 1%).</p>
</li>
<li><p>Example: According to this, Australia would be 'Keynesian', since it <a href="https://fbe.unimelb.edu.au/__data/assets/pdf_file/0007/1157038/SHUYUN_MAY_LI_-_ADAM_SPENCER.pdf#page=3" rel="nofollow noreferrer">increased spending by 4%</a> in response to a <a href="https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=AU" rel="nofollow noreferrer">1.6% downturn in 2008/9</a>.</p>
</li>
</ul>

CC BY-SA 4.0
2021-02-12T12:30:00.810Z
1) If a country has welfare state programmes, they automatically increase during a recession. 2) There is a difference between countries that control their currency, vs. those that borrow in foreign currencies. Countries that borrow in a foreign currency can have an external crisis that forces them to cut spending in a crisis. They are “non-Keynesian” involuntarily.
Brian Romanchuk
CC BY-SA 4.0
2021-02-12T12:46:11.713Z
@BrianRomanchuk 1) That's true, but note "intentionally", so the increase in govt. spending must at least in significant part be non-autonomous. 2) Also true, but an inability to implement Keynesian ideas during one downturn doesn't imply a country is against Keynesian ideas and wouldn't implement them if they could, or didn't implement them during other downturns (hence to half-century timeframe in the question - enough to account for several downturns)
stevec
CC BY-SA 4.0
2021-02-12T12:46:56.590Z
This would be difficult to verify because a person would have to first  examine when individual countries had recessions. For example, your Australian example is incorrect because most economists do not believe Australia had recession in 2009  (e.g. see this bbc article https://www.bbc.com/news/business-53994318#) Hence, already your example of Australia violates your own definition. This being said I would be extremely surprised if there would be any country in last 50y that would not at least once increase spending by modest 2.5% during recession but examining that would take days.
1muflon1
CC BY-SA 4.0
2021-02-12T12:56:56.420Z
@1muflon1 A less strict way to see the question: do any countries reject Keynes's thesis that governments should increase spending during downturns, and does the data (i.e. those countries' policies) in past downturns reflect that? If you can show one/some countries reject these ideas, that answers the question.
stevec
CC BY-SA 4.0
2021-02-12T13:08:22.190Z
@stevec but how do you define reject/accept Keynes thesis, and what exactly was Keynes thesis? I hold Keynes in great regard but even the most adherent Keynes fanboy has to concede that Keynes was never exactly clear on what sort of model/framework he was using and many of his proposals were Great Depression specific. E.g. modern Keynesian/New-Keynesian models do not show that in every recession government has to increase spending and that in regular recession monetary policy can be better. Also, its impossible to say if country rejects/approves of idea if you dont define it in measurable way
1muflon1
CC BY-SA 4.0
2021-02-12T13:18:27.853Z
@1muflon1 if the Keynes reference throws you off, just view the question loosely as: "Have all modern economies attempted to increase non-autonomous spending in response to a downturn at least once in the past 50 years". I pose the question not because I'm necessarily interested in applying strict definitions, but because I'm interested in knowing whether countries widely adopt the "spend more during downturn" philosophy that the US has in recent decades. That is all I will be commenting here in the comments. Thank you.
stevec
CC BY-SA 4.0
2021-02-12T13:56:38.720Z
@stevec right but then you get back to my point in my first response. A) it is extremely likely they did at least at some point do that. B) to actually check that you would need to spend by my estimates at least few days of sifting through data so it’s unlikely you would find someone putting the effort required to answer. Also I am not trying to put down your question - in itself the original question was fine - I am just giving you a feedback because I guess you would like to get some answer and that is unlikely if question is written in a way that would require days of research.
1muflon1
CC BY-SA 4.0
2021-02-12T16:09:26.757Z
1) One can’t brush aside the issue of involuntary constraints. Many economists believed their countries were constrained by bond markets when others disagree with that assessment. Very hard to assess without digging deeply into historical records. 2) The other issue is that “countries” do not think things, policymakers do. There are certainly some economists who reject Keynesian thinking, but how influential are they?
Brian Romanchuk
<macroeconomics><theory><fiscal-policy><keynesian-economics><government-spending>
Loosely speaking, are all modern economies 'Keynesian' in their stance on spending during downturns?
stevec
# Loosely speaking, are all modern economies 'Keynesian' in their stance on spending during downturns?

(Asked by: username_0 on 2021-02-12)

Keynesian economics is [defined](https://www.investopedia.com/terms/k/keynesianeconomics.asp) as:

> increased government expenditures and lower taxes to stimulate demand and pull the global economy out of the depression.

Do all modern economies adopt a Keynesian fiscal stance during significant economic downturns? Or have some demonstrated that they will not increase government spending at all during downturns?

Notes:

* To make the question less ambiguous, please assume a country is 'Keynesian' if government spending was intentionally increased by at least 2.5% during a downturn of at least 1% at any point in the last 50 years (and 'somewhat Keynesian' if government spending increased by 1.5% during a downturn of at least 1%).
* Example: According to this, Australia would be 'Keynesian', since it [increased spending by 4%](https://fbe.unimelb.edu.au/__data/assets/pdf_file/0007/1157038/SHUYUN_MAY_LI_-_ADAM_SPENCER.pdf#page=3) in response to a [1.6% downturn in 2008/9](https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=AU).

**Tags:** macroeconomics, theory, fiscal-policy, keynesian-economics, government-spending

> **Comments:**
> **username_1**: 1) If a country has welfare state programmes, they automatically increase during a recession. 2) There is a difference between countries that control their currency, vs. those that borrow in foreign currencies. Countries that borrow in a foreign currency can have an external crisis that forces them to cut spending in a crisis. They are “non-Keynesian” involuntarily.  
> **username_0**: @username_1 1) That's true, but note "intentionally", so the increase in govt. spending must at least in significant part be non-autonomous. 2) Also true, but an inability to implement Keynesian ideas during one downturn doesn't imply a country is against Keynesian ideas and wouldn't implement them if they could, or didn't implement them during other downturns (hence to half-century timeframe in the question - enough to account for several downturns)  
> **username_2**: This would be difficult to verify because a person would have to first  examine when individual countries had recessions. For example, your Australian example is incorrect because most economists do not believe Australia had recession in 2009  (e.g. see this bbc article https://www.bbc.com/news/business-53994318#) Hence, already your example of Australia violates your own definition. This being said I would be extremely surprised if there would be any country in last 50y that would not at least once increase spending by modest 2.5% during recession but examining that would take days.  
> **username_0**: @username_2 A less strict way to see the question: do any countries reject Keynes's thesis that governments should increase spending during downturns, and does the data (i.e. those countries' policies) in past downturns reflect that? If you can show one/some countries reject these ideas, that answers the question.  
> **username_2**: @username_0 but how do you define reject/accept Keynes thesis, and what exactly was Keynes thesis? I hold Keynes in great regard but even the most adherent Keynes fanboy has to concede that Keynes was never exactly clear on what sort of model/framework he was using and many of his proposals were Great Depression specific. E.g. modern Keynesian/New-Keynesian models do not show that in every recession government has to increase spending and that in regular recession monetary policy can be better. Also, its impossible to say if country rejects/approves of idea if you dont define it in measurable way  
> **username_0**: @username_2 if the Keynes reference throws you off, just view the question loosely as: "Have all modern economies attempted to increase non-autonomous spending in response to a downturn at least once in the past 50 years". I pose the question not because I'm necessarily interested in applying strict definitions, but because I'm interested in knowing whether countries widely adopt the "spend more during downturn" philosophy that the US has in recent decades. That is all I will be commenting here in the comments. Thank you.  
> **username_2**: @username_0 right but then you get back to my point in my first response. A) it is extremely likely they did at least at some point do that. B) to actually check that you would need to spend by my estimates at least few days of sifting through data so it’s unlikely you would find someone putting the effort required to answer. Also I am not trying to put down your question - in itself the original question was fine - I am just giving you a feedback because I guess you would like to get some answer and that is unlikely if question is written in a way that would require days of research.  
> **username_1**: 1) One can’t brush aside the issue of involuntary constraints. Many economists believed their countries were constrained by bond markets when others disagree with that assessment. Very hard to assess without digging deeply into historical records. 2) The other issue is that “countries” do not think things, policymakers do. There are certainly some economists who reject Keynesian thinking, but how influential are they?  

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## 0 answers

