ABSTRACT
John Maynard Keynes’s The General Theory of Employment, Interest and Money serves as a reference point for policymakers in discussing how to manage macroeconomic (economy-wide) fluctuations and crises. It reshaped the academic and policy study of economics. It forced a systemic rethink of the theoretical foundations of economics and the almost unquestioned belief in the efficiency of free markets. The Keynesian economics tradition has produced a number of notable “star” academics and policymakers. The book argued that the full employment and natural balance of capitalist economies, believed in by classical economists, can only occur in particular cases; it detailed the important role that states should play in boosting aggregate demand in order to achieve full employment. From the aftermath of World War II through to the 1970s, Keynesian economics ascended to the pinnacle of economic policymaking and became, for a time, almost unchallenged in US and Western Europe.
