Keynesian economics

Keynesian economics is a statist economic philosophy where a government makes decisions in guiding the economy on a sober path. A real free market can become irrational due to the fact that it is backed by human behavior. Humans are normally rational when making financial decisions on paper, however, when faced with real situations and the possibility of quick gains, a free market may become so irrational that an outside intervention by the government is required to correct the discrepancy. Keynesian economics focuses on controlling aggregate consumer demand. This is done through fiscal (government) and monetary (central bank) policies such as taxation control, deliberate government spending even at a deficit, raising or lowering interbank interest rates or buying and selling government securities which is done through a central bank.

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