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ISSN: 2692-5206, Impact Factor: 12,23
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Journal:
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KEYNESIAN THEORY OF ECONOMIC GROWTH: STATE INTERVENTION AND
ECONOMIC STABILITY
Z.B.Jumayeva
Asia international university, Bukhara
Abstract:
The Keynesian theory of economic growth, developed by John Maynard Keynes in the
mid-20th century, emphasizes the crucial role of government intervention in ensuring economic
stability and full employment. According to Keynes, the private sector alone cannot always
maintain full employment; thus, fiscal and monetary policies should be used to regulate
aggregate demand. The Keynesian model highlights the interconnection between investment,
consumption, and savings, with the "multiplier-accelerator" mechanism playing a key role in
economic expansion. This paper examines the theoretical foundations of the Keynesian growth
model, its application in different countries, and its relevance to Uzbekistan's economic policies.
Furthermore, it discusses the critiques of Keynesianism from neoclassical economists and the
integration of Keynesian principles with modern economic growth theories. The paper concludes
with policy recommendations for fostering sustainable economic growth based on Keynesian
principles.
Keywords:
Keynesian economics, economic growth, government intervention, fiscal policy,
monetary policy, aggregate demand, Uzbekistan, investment, multiplier effect
The Keynesian theory of economic growth, formulated by John Maynard Keynes, underscores
the necessity of active government intervention in regulating aggregate demand to achieve
economic stability and full employment. Keynes argued that the private sector alone might fail to
ensure optimal employment levels, necessitating government policies to stimulate economic
activity through public expenditures and tax regulations.
Several scholarly sources provide insight into the theoretical and practical aspects of Keynesian
economic growth. The textbook "Economic Growth" explores the components, factors, and
mechanisms of economic development, emphasizing government policies' role in fostering
sustainable growth. "Economic Theory" by Sh. Shodmonov discusses fundamental economic
concepts, including growth models and state intervention. The historical evolution of economic
thought, including Keynesian ideas and their contemporary implications, is covered in "History
of Economic Doctrines" by L.N. Khalikova and U.R. Mavlonova. Additionally, Keynes’s
seminal work, "The General Theory of Employment, Interest, and Money," serves as the
foundation for Keynesian economics, analyzing employment, interest rates, and monetary
policies. Modern interpretations of Keynesianism, such as "Keynes: The Return of the Master"
by Robert Skidelsky, assess its relevance in today’s economic policies.
The Keynesian economic model focuses on short-term factors influencing economic growth and
highlights the government's role in maintaining stability. The multiplier-accelerator mechanism
demonstrates how investment changes can significantly impact national income. However,
Keynesianism has faced criticism from neoclassical economists, who emphasize technological
progress and capital efficiency as the primary drivers of long-term growth.
INTERNATIONAL JOURNAL OF ARTIFICIAL INTELLIGENCE
ISSN: 2692-5206, Impact Factor: 12,23
American Academic publishers, volume 05, issue 03,2025
Journal:
https://www.academicpublishers.org/journals/index.php/ijai
page 745
Keynesian principles have been applied in various economic contexts. During the Great
Depression, the U.S. government increased public spending to stimulate demand. Post-World
War II, the UK expanded social programs to drive recovery. Similarly, during the 2008 financial
crisis, Germany implemented fiscal stimulus measures to support economic growth. In
Uzbekistan, government-led investments and infrastructure projects have contributed to
economic expansion, aligning with Keynesian principles.
A comparative analysis of Keynesian applications is provided in the following table:
Country
Keynesian Approach in Practice
United States
Increased public spending during the Great Depression
United Kingdom Post-war economic recovery through social programs
Germany
2008 financial crisis response with fiscal stimulus
Uzbekistan
State-led investments and industrialization policies
Keynesian economics highlights the importance of government intervention in regulating
aggregate demand and ensuring economic stability. While it has faced criticisms from
neoclassical theorists, Keynesian principles remain relevant in addressing economic challenges.
Based on Keynesian insights, the following policy recommendations are proposed:
1.
Active government involvement:
Implement fiscal and monetary policies to sustain
aggregate demand and promote economic stability.
2.
Encouraging private sector investment:
Provide incentives for private sector growth,
as investments drive economic expansion.
3.
Support for technological innovation:
Foster technological advancements to enhance
productivity and competitiveness.
4.
Focus on education and workforce development:
Strengthen education systems to
ensure a skilled labor force, supporting long-term economic growth.
5.
Ensuring social equity:
Address income disparities to maintain social stability and
overall economic well-being.
These recommendations align with Keynesian economic principles and can enhance
Uzbekistan’s economic policies, promoting long-term growth and stability.
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ISSN: 2692-5206, Impact Factor: 12,23
American Academic publishers, volume 05, issue 03,2025
Journal:
https://www.academicpublishers.org/journals/index.php/ijai
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INTERNATIONAL JOURNAL OF ARTIFICIAL INTELLIGENCE
ISSN: 2692-5206, Impact Factor: 12,23
American Academic publishers, volume 05, issue 03,2025
Journal:
https://www.academicpublishers.org/journals/index.php/ijai
page 747
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