Keynesian economics is a macroeconomic theory that focuses on the role of government intervention in managing aggregate demand to address or prevent economic recessions. It was developed by British economist John Maynard Keynes in response to the Great Depression. The key principles of Keynesian economics include:

• Aggregate Demand: Keynesian economists believe that the driving force of an economy is aggregate demand, which is the total spending for goods and services by the private sector and government. They argue that fluctuations in any component of spending, such as consumption, investment, or government expenditures, can cause fluctuations in the economy.

• Government Intervention: Keynesian economists believe that free markets have no self-balancing mechanisms that lead to full employment, and that government intervention is necessary to achieve full employment and price stability. They advocate for active government policies, such as increasing government spending or cutting taxes, to manage aggregate demand and stabilize the economy.

• Rigid Prices: Keynesians believe that prices, and especially wages, respond slowly to changes in supply and demand, resulting in periodic shortages and surpluses, especially of labor. They argue that monetary policy can produce real effects on output and employment only if some prices are rigid.

Critics of Keynesian economics argue that it promotes deficit spending, stifles private investment, and causes inflation. However, Keynesian economics has had a significant impact on economic thought and policy, particularly in the mid-20th century.