Keys to the Keynes
W hen one examines history from the current day, a much clearer picture emerges. If hindsight is 20/20, then examining the past from the present can provide an even clearer picture. The Great Depression struck every American home. Over the years, experts have provided insights into the causes, impacts, and resolutions of that event. This post explores the causes, impacts, and resolutions of the Great Depression through the lens of John Maynard Keynes’ theory of aggregate demand. In his 1936 book, The General Theory of Employment, Interest, and Money , Keynes explains his theory of aggregate demand. The economic theory of Keynes, often referred to as Keynesian economics, offers an interesting approach to understanding economic activity. Keynesian economics argues that the total spending in an economy is the primary driver of economic activity and employment. If the aggregate demand is insufficient, economic downturns an...