Keynes on the Marginal Efficiency of Capital and the Great Depression

Lefteris Tsoulfidis (lnt@uom.edu.gr)

MPRA Paper from University Library of Munich, Germany

Abstract: This paper argues that Keynes’s analysis of the marginal efficiency of capital is consistent with the principle of effective demand and is, in this sense, characteristically different from the related classical or neoclassical conceptualisations. Furthermore, the notion of the marginal efficiency of capital is used not only as an explanation of the short term fluctuations in the level of economic activity but also as an interpretation of more serious long term fluctuations such as that of the great depression. Finally, some of Keynes’s economic policy proposals are critically evaluated.

Keywords: Marginal efficiency of capital; effective demand; great depression; interest rate; overinvestment (search for similar items in EconPapers)
JEL-codes: B10 B12 B14 B51 E32 E4 E6 E65 N20 (search for similar items in EconPapers)
Date: 2008, Revised 2015
New Economics Papers: this item is included in nep-his, nep-hme, nep-hpe, nep-mac and nep-pke
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Published in History of Economic Ideas 3.16(2008): pp. 65-78

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Journal Article: Keynes on the Marginal Efficiency of Capital and the Great Depression (2008)
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