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The General Theory of Employment, Interest and Money is a book by English economist John Maynard Keynes published in February 1936. It caused a profound shift in economic thought, [1] giving macroeconomics a central place in economic theory and contributing much of its terminology [2] – the "Keynesian Revolution". It had equally powerful ...
Keynesian economics developed during and after the Great Depression from the ideas presented by Keynes in his 1936 book, The General Theory of Employment, Interest and Money. [5] Keynes' approach was a stark contrast to the aggregate supply-focused classical economics that preceded his book.
Keynes's simplified starting point is this: assuming that an increase in the money supply leads to a proportional increase in income in money terms (which is the quantity theory of money), it follows that for as long as there is unemployment wages will remain constant, the economy will move to the right along the marginal cost curve (which is ...
Keynes's magnum opus, The General Theory of Employment, Interest and Money was published in 1936. [10] It was researched and indexed by one of Keynes's favourite students, and later economist, David Bensusan-Butt. [50] The work served as a theoretical justification for the interventionist policies Keynes favoured for tackling a recession.
Keynes expanded on the concept of liquidity preferences and built a general theory of how the economy worked. Keynes's theory brought together both monetary and real economic factors for the first time, [9] explained unemployment, and suggested policy achieving economic stability. [23]
According to Keynes it is the principle of effective demand that determines the level of output and employment in a country. In chapter 3 of John Maynard Keynes's book The General Theory of Employment, Interest and Money , he defines the concept of effective demand as the point of intersection of these two aggregate functions—at this point of ...
John Hicks's 1937 paper Mr. Keynes and the "Classics"; a suggested interpretation is the most influential study of the views presented by J. M. Keynes in his General Theory of Employment, Interest, and Money of February 1936.
In macroeconomic theory, liquidity preference is the demand for money, considered as liquidity.The concept was first developed by John Maynard Keynes in his book The General Theory of Employment, Interest and Money (1936) to explain determination of the interest rate by the supply and demand for money.