The Keynesian Economic Problem and its Solution

Gordon A. Fletcher
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Gordon A. Fletcher: The University of Liverpool

Chapter 14 in The Keynesian Revolution and its Critics, 1987, pp 167-181 from Palgrave Macmillan

Abstract: Abstract Keynes regarded the post-1918 experiences of Great Britain and the USA as actual examples of his thesis that technically advanced, capital-rich economies could suffer depression and privation where they might reasonably expect full employment and prosperity. The factors common to both, which for Keynes explained the apparent anomaly, were that the level of economic activity was dependent almost entirely on the free play of market forces, and that the rate of interest and the marginal efficiency of capital had come into a special relationship with each other such that, in the absence of any purposive management of investment and consumption behaviour, full employment could not be achieved.

Keywords: Monetary Policy; Trade Cycle; Capital Stock; Full Employment; Capital Asset (search for similar items in EconPapers)
Date: 1987
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-08736-5_14

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DOI: 10.1007/978-1-349-08736-5_14

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