John Maynard Keynes (1883-1946)

Date: 2015-10-07; view: 825.

The English economist John Maynard Keynes is regarded as the originator of modern macroeconomics.

The son of an eminent English economist, Keynes was educated at Eton and Cambridge. While his early interests were in mathematics and probably theory, Keynes ultimately turned to economics.

In 1935 George Bernard Shaw received a letter from John Maynard Keynes in which Keynes wrote, “I believe myself to be writing a book on economic theory, which will largely revolutionize… the way the world thinks about economic problem”. And, in fact, Keynes's The General Theory of Employment, Interest and Money (1936) did revolutionize economic analysis and established Keynes as one of the most influential economists of all time. The General Theory attacked the classical economists' contention that recession will automatically cure itself. Keynes analysis suggested that recession could easily spiral downward into a depression. Keynes claimed that modern capitalism contained no automatic mechanism that would propel the economy back towards full employment. The economy might languish for many years in depression of the 1930s seemed to provide sufficient evidence that Keynes was right. His basic policy recommendation for government in these circumstances was to increase its spending to include more production and put the unemployed back to work.