Is Keynesian Demand Management Policy Still Viable?

Keynesian policy in the United States, and to call for a defense. The debate no longer revolves solely around obscure theoretical issues. The arguments supporting policy ineffectiveness inthe current economy exceed differences between schools of economic thought and political ideologies, and need not challenge the wisdom or effectiveness of the policies of past decades. As a result of earlier policy choices, changing technologies, and special innovations in the financial industry, the structure of the economy has changed. In the present U.S. economic setting, demand management policies may be largely ineffective, and in some cases, contribute more to the problems than to the solutions. The postwar era through the 1970s was dominated by economic policies that focused on adjustments to aggregate demand. The dominant policy approach involved attempting to overpower apparent failures at the level of individual markets by gross changes to spending at the aggregate level. This approach is consistent with Keynesian theory, and some argue that it may even have been effective. There was no evidence of significant crowding effects, exchange rates were fixed under the Bretton Woods agreement, and the rapid growth in real output exceeded the growth of monetary aggregates that were required to continue the domestic interest