The General Theory of Employment, Interest, and Money
"The General Theory of Employment, Interest, and Money," written by John Maynard Keynes, argues that economic recessions can occur due to insufficient demand for goods and services, leading to unemployment. Keynes challenges classical economic theories that suggest markets automatically adjust to full employment. He emphasizes the importance of government intervention, such as fiscal spending, to stimulate demand and reduce unemployment. Keynes also explores the relationship between interest rates and investment, asserting that lower interest rates can encourage borrowing and spending. Overall, the book laid the foundation for modern macroeconomic theory and policy.
Additional Insights
-
"The General Theory of Employment, Interest and Money," written by John Maynard Keynes in 1936, argues that unemployment and economic downturns can persist without government intervention. Keynes asserted that total demand in an economy drives production and employment. When demand is low, businesses reduce hiring, leading to more unemployment and less spending. He advocated that governments should actively manage economic policy, using tools like fiscal stimulus—spending and tax adjustments—to encourage demand and boost the economy, especially during recessions. This work laid the foundation for modern macroeconomics and reshaped government responses to economic crises.