Word: keynesism
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Economics is a young science, a mere 200 years old. Addressing its problems in the second half of its second century, Keynes was more successful than his predecessors in seeing it whole. Great theorists before him had tried to take a wide view of economic forces, but they lacked the...
For most of his life, Keynes wrote, wrote, wrote. He was so prolific that a compendium of his books, tracts and essays fills 22 pages. In succession he wrote books about mathematical probability (1921), the gold standard and monetary reform (1923), and the causes of business cycles (1930); each of...
Permanent Quasi-Boom. Keynes perceived that the prime goal of any economy was to achieve "full employment." By that, he meant full employment of materials and machines as well as of men. Before Keynes, classical economists had presumed that the economy was naturally regulated by what Adam Smith had called...
Keynes showed that the hard facts of history contradicted these unrealistic assumptions. For centuries, he pointed out, the economic cycle had gyrated from giddy boom to violent bust; periods of inflated prosperity induced a speculative rise, which then disrupted commerce and led inexorably to impoverished deflation. The climax came during...
By applying both logic and historical example to economic cycles, Keynes showed that the automatic stabilizers that economists had long banked on could actually aggravate rather than prevent a depression. If employers responded to a fall-off in demand by slicing wages and dumping workers, said Keynes, that would only...