Question

What was FDR's New Deal doing that reflected the practice of Keynesian economics.....

Please elaborate.

Answer 1

Great depression hit the US and world Economy in 1929. The Demand fell down to low, overall 25 % people were rendered unemployed!!! Classical economists were not in the favor of government interference in the economic activities. But it was keynes who advocated the government activities in the economic sphere by investing in the public works. Hence US congress adopted the policy of NEW DEAL to deal with depression. It helped to pull out the economy from depression.

Further during the present crisis of 2008, again the government increased its spending and followed the tenets of keynesian economics. It again helped to reduce the impacts of global recession. Now US economy has been successful in reducing the unemployment to the level of 5 %and growth has picked up to the 3 %.

Thus we can say that keynesian economics is still relevant when it comes to recession.
Keynsians were in favor of supply side economics. After a recession, Reagan used his government policy to give stimulus to the supply by more government investment, So, by many economists' opinion, he was a Keynsian because of these policies.
Thank You