It is the modern macroeconomic idea, which evolved from the controversial ordinary Keynesian economics. The new Keynesian theory attempts to address, among other things and its cause. The new theory explains how the market failures could be caused by inefficiencies, and what might be justified for government intervention.The theory is that it maintains prices and wages that are out of lined, and how adjust them slowly to economic fluctuations. The Keynesian approach is important in macroeconomic policy making because it allowed a new theory to evolve. This new theory explains how could market failures are caused. This new theory is important to the macroeconomic policy making because it helps determine what are the failures of the part of the economy with a variety or vague economic factors such as interest rates and national …show more content…
So it is more difficult to pass a stimulus package/law, then the beginning of President Obama’s presidency when he passed the American Recovery and Reinvestment Act of 2009, when the Democrats had control of the house and Congress. The American Recovery and Reinvestment Act of 2009 was from Keynesian macroeconomic theory, which was the government’s first attempt to help the economy recovery from the financial crisis and recession of 2008. This act enabled the government to borrow more money, so it could increase government spending and cut taxes. This was easy to pass cause the Democrats got to control and Democrats have more a Keynesian approach. While the Republicans do not. So, towards the end of Barack Obama’s presidency the government is becoming less Keynesian because its hard to pass new laws and stimulus packages that increase government spending because the Republicans are against it and they are a majority of the house and Congress. It is an obstacle. That is my belief cause the Democrats do not have as much control in the legislative branch. Truthfully, I believe it is more that the government is not likely to become more or less Keynesian in the coming 12 months because the Keynesian approach is more of the Democrat philosophy. Determining whether the government becomes