<P> Keynesian economists generally argue that, as aggregate demand is volatile and unstable, a market economy will often experience inefficient macroeconomic outcomes in the form of economic recessions (when demand is low) and inflation (when demand is high). These can be mitigated by economic policy responses, in particular, monetary policy actions by the central bank and fiscal policy actions by the government, which can help stabilize output over the business cycle . Keynesian economists generally advocate a managed market economy--predominantly private sector, but with an active role for government intervention during recessions and depressions . </P> <P> Keynesian economics served as the standard economic model in the developed nations during the later part of the Great Depression, World War II, and the post-war economic expansion (1945--1973), though it lost some influence following the oil shock and resulting stagflation of the 1970s . The advent of the financial crisis of 2007--08 caused a resurgence in Keynesian thought, which continues as new Keynesian economics . </P> <P> Macroeconomics is the study of the factors applying to an economy as a whole, such as the overall price level, the interest rate, and the level of employment (or equivalently, of income / output measured in real terms). </P> <P> The classical tradition of partial equilibrium theory had been to split the economy into separate markets, each of whose equilibrium conditions could be stated as a single equation determining a single variable . The theoretical apparatus of supply and demand curves developed by Fleeming Jenkin and Alfred Marshall provided a unified mathematical basis for this approach, which the Lausanne School generalized to general equilibrium theory . </P>

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