Keynesian economics, developed by John Maynard Keynes, focuses on the role of aggregate demand in determining economic output and employment, especially in the short run. It argues that markets may not automatically return to full employment during recessions. Therefore, government intervention—through fiscal policy (public spending and taxation) and monetary policy—is considered necessary to stabilize the economy and reduce unemployment.

In contrast, Austrian economics, associated with Ludwig von Mises and Friedrich Hayek, emphasizes individual decision-making, market coordination through prices, and limited government intervention. Austrian economists argue that economic crises are often caused by excessive credit expansion and government interference, which distort investment decisions. Recessions are seen as necessary adjustments that correct previous imbalances.

Although they differ, both approaches can complement each other. Keynesian policies may help stabilize the economy in the short term during severe downturns. At the same time, Austrian principles highlight the importance of maintaining sound monetary policy and avoiding long-term distortions.