Keynesian Formula

The Keynesian formula is an economic theory developed by the British economist John Maynard Keynes. Keynes argued that the level of output and employment in the economy was determined by aggregate demand or effective demand. In a reversal of Say's Law, Keynes in essence argued that "man creates his own supply," up to the limit set by full employment. Adherents of the Austrian and Monetarist and schools of economic thought are critical of this theory.