Keynesian Economics and China’s GDP

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1. Introduction
Keynes published and introduced his economic theory in 1936, during the Great Depression, and gave guidance for government in formulation of monetary and fiscal policies. His model was widely acknowledged during recession times when classical economic model somehow failed to effectively and productively solve some economic problems such as unemployment. Although China’s economy is believed to have “Chinese characteristics” and cannot hastily adopt a Western model, Keynesian economics is still believed to receive embracement in China, as government intervention is wider and deeper than most of other economies of such large size. Therefore, the main issue this essay concerns with is the influence of Keynesian on China’s economy reflected by GDP.
This work will discuss Keynesian economics and its effects on China’s economy in the following order. First of all, a brief background of the Keynesian economic model is introduced. Main focus of the general theory and the difference compared with classical models are explained next in the same major section. They followed by the theory’s application, modification and opposition. The second major section mainly discusses Keynesian’s effects on China’s economy. Firstly, the country’s economic history and the introduction of Keynesian need to be noted. Then this paper discusses the influence of its politics and its opening up policy, and the relationship with Keynesian economics. The recent financial crisis as a special incident and Chinese government’s response to it are then discussed, including proof of the practice of Keynesian in China, especially the four trillion stimulus package. A critical evaluation is then given, aimed at analyzing the effects of China’s macroeconomi...

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