Is Keynesian Economics Dead?

Since capitalism's beginnings, the market economy has been subject to fluctuations, to booms and busts. Capitalist economies are not self-adjusting: market forces might eventually restore an economy of full employment, as Keynes said, but in the long run we are all dead. Keynes proposed clear prescriptions for hard economic times: expansionary monetary and fiscal policy. He thought fiscal policy particularly important in situations where monetary policy was likely to be ineffective.