KEYNESIAN ECONOMIC THEORY

Until the onset of the Great Depression (1929–1939), it was conventional wisdom in classical economics that the best way to manage the economy was to take a laissez-faire, or "hands off," approach. Classical economists believed that, left to their own devices, economies tended toward full employment on their own, and that the best way to deal with a depression was to expand the money supply and wait for the economy to return to "equilibrium."