The Principle of Effective Demand: The Key to Understanding the General Theory

Colin Rogers

Chapter 9 in Keynes’s General Theory After Seventy Years, 2010, pp 136-156 from Palgrave Macmillan

Abstract: Abstract It is generally acknowledged that the General Theory is enigmatic. On the one hand Keynes’s claimed to be presenting a theoretical revolution. Yet on the other hand the majority of Keynes’s contemporaries immediately concluded that the General Theory was nothing more than a special case of the classical model. The majority of economists have followed Frank Knight’s (1937 [1983, p. 1571) advice to, “... simply ‘forget’ the revolution in economic theory and read the book [the General Theory] as a contribution to the theory of business oscillations”.

Keywords: Interest Rate; Monetary Policy; Business Cycle; Central Bank; Natural Rate (search for similar items in EconPapers)
Date: 2010
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DOI: 10.1057/9780230276147_10

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