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Lectures on John Maynard Keynes’ General Theory of Employment, Interest and Money (3): Chapter 3, “The Principle of Effective Demand”

Brian Ferguson

No 1308, Working Papers from University of Guelph, Department of Economics and Finance

Abstract: In Chapter 3 of the General Theory, Keynes sketches out what he calls the essence of the General Theory of Employment. He introduces the Keynesian expenditure-based model, his aggregate demand function and also his aggregate supply function, a concept which spawned much debate among Post-Keynesian economists but which was, for a long time, virtually ignored in mainstream macroeconomics. He sets out the Savings = Investment version of Say’s Law and outlines how an economy can settle into an equilibrium at less than full employment.

Keywords: Keynes; General Theory; Keynesian Economics; Classical Economics; Aggregate Demand; Aggregate Supply; Unemployment Equilibrium; Say’s Law. (search for similar items in EconPapers)
JEL-codes: B10 B12 B13 B22 B31 E12 N12 N14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hpe, nep-mac and nep-pke
Date: 2013
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Handle: RePEc:gue:guelph:2013-08