Jonathan Keeble

The General Theory of Employment, Interest and Money is a book by English economist John Maynard Keynes and is generally considered to be Keynes' magnum opus, and is largely credited with creating the terminology and shape of modern macroeconomics. The General Theory of Employment, Interest and Money had equally powerful consequences in economic policy, being interpreted as providing theoretical support for government spending in general, and for budgetary deficits, monetary intervention and counter-cyclical policies in particular. It is pervaded with an air of mistrust for the rationality of free-market decision making. Keynes denied that an economy would automatically adapt to provide full employment even in equilibrium, and believed that the volatile and ungovernable psychology of markets would lead to periodic booms and crises. The General Theory is a sustained attack on the classical economics orthodoxy of its time. It introduced the concepts of the consumption function, the principle of effective demand and liquidity preference, and gave new prominence to the multiplier and the marginal efficiency of capital.

The General Theory of Employment, Interest and Money of 1936 is a book by English economist John Maynard Keynes. It caused a profound shift in economic thought, giving macroeconomics a central place in economic theory and contributing much of its terminology - the "Keynesian Revolution". It had equally powerful consequences in economic policy, being interpreted as providing theoretical support for government spending in general, and for budgetary deficits, monetary intervention and counter-cyclical policies in particular. It is pervaded with an air of mistrust for the rationality of free-market decision making. Regarded widely as the cornerstone of Keynesian thought, this book challenged the established classical economics and introduced new concepts. It remains a relevant topic of debate to this day, perhaps more than ever. Given the economic turmoil of recent years, this debate is more heated than ever, between the Keynesian model of economics of Bush and Obama which favors bailouts and other government intervention to try to stabilize the market, and the Austrian school of economics which sees government intervention as detrimental and favors letting the market sort itself out on its own with minimal government interference.