John Maynard Keynes was the most influential economist of the 20th Century, whose doctrines had a huge impact on American prosperity in the years following the Second World War. This new book by John Philip Jones describes the main features of Keynes' work, including the fiscal and monetary policies he recommended, together with a detailed tracking of how his theories played out in the American economy. The book focuses on each individual aspect of Keynes' doctrines: his revolutionary emphasis on the economy as a whole (the study that would later become known as macroeconomics); consumer demand and where it leads; investment demand and where it leads; the rate of interest and the influence of monetary policy; the role of government in controlling fiscal policy; and the overarching importance of expectations, optimism and pessimism. The book concludes with the seven major lessons drawn from the American economy in the latter half of the 20th Century and how these lessons were forecast by Keynes. An excellent introduction to Keynes and his legacy for students and non-specialist members of the public who want to know more about how the economy is controlled and stimulated, it is also of considerable interest to students of modern economic history.
List of illustrations
About the author
Acknowledgments
Introduction: Why Keynes matters
1 Keynes's legacy, 70 years later 1
The three pillars of Keynes's doctrines 9
Keynes under attack 15
An education in economics 20
2 Three signposts 24
Fault lines in the American economy 27
A half-century of aggregate demand and output 28
The third signpost - employment and unemployment 32
Types of unemployment 38
3 Consumer demand and where it leads 42
Connections 43
The propensity to consume 45
Money and liquidity-preference 48
A web of relationships 54
Trends 56
Footnote on the spectrum of interest rates 60
4 Investment demand and where it leads 63
Investment supply - where the money comes from 65
Investment demand - putting the money to work 68
Expectations 71
5 The rate of interest 77
A digression on three types of price 78
Four periods of economic activity 88
6 What should the government be doing? 99
American economic policy during the 1930s 101