John Maynard Keynes

The slides comprises few information about the founder of modern economics - John Maynard Keynes.

1. John Maynard Keynes Evolution of Economic Thoughts

2. Personal background Birth: 1883, Cambridge Death: 1946, Sussex Academic: King’s College Professors: Alfred Marshall, A. C. Pigou He was a mathematician, a statistician and then an economist Best known work: Economic theories on the causes of prolonged unemployment

3. Publications Economic consequence of Peace (1919) A Treatise of Probability (1921) A Tract on Monetary Reform (1923) A Treaties on Money (1930) The General Theory of Employment, Interest and Money (1936)

4. A Tract on Monetary Reform (1923 ) A trenchant argument that countries should target stability of domestic prices, avoiding deflation even at cost of allowing their currency to depreciate Britain suffered from high unemployment through most of the 1920s Keynes recommended the depreciation of sterling to boost jobs making British exports more affordable

5. Treatise on Money (1930) During the great depression Relationship between unemployment, money and prices led this work Two volumes Central idea: if the amount of money being saved exceeds the amount being harvested – which cam be happen if interest rates are too high – then unemployment will rise

6. The General Theory of Employment, Interest and Money (1936) Advocated the remedy for economic recession based on government-sponsored policy for full employment Challenged the neo-classical economic paradigm General Theory argues that demand is the key variable governing the overall level of economic activity AD = Consumption + Investment (total un-hoarded income) Enhancement of unemployment: By increasing expenditure of either consumption or investment Foundation for modern macroeconomics

7. Views on capitalism Argued that if capitalism were managed domestically and internationally, then this system of managed capitalism could promote peace rather than conflict between countries Rescued capitalism

8. Critique of the Classical System Classical school dominated as the school of economic thought until the Great Depression John Maynard Keynes asked, “If supply creates its own demand, why are we having a worldwide depression?” He advocated massive government intervention to bring to an end to the Great Depression