Chapter 8: The impact of The General Theory on Economic Theory and the Development of Public Policies: A Nested Vision of Keynes’s Ideas with the Classical Vision through a Panoramic View of his Works
Lall Ramrattan and Michael Szenberg INTRODUCTION The evolution of Keynes’s economic theories matured into the milestone Keynesian framework of The General Theory of Employment, Interest, and Money (Keynes 1936). Prior to this, Keynes’s first milestone came in his defence of the gold exchange standard in Indian Currency and Finance (Keynes, Collected Writings (CW), vol. I), and the last milestone of Keynes’s brilliant career tackled his arguments for the Bretton Woods system in 1944. Between these two milestones lay his panoramic views that credit him with the development of macroeconomics. Keynes’s views from the Indian Currency dealing with the gold exchange standard, his Tract on Monetary Reform (Keynes, CW, vol. IV) dealing with price stability, his two volume work A Treatise on Money (Keynes, CW, vols. V and VI) establishing disparities between investments and savings, and The General Theory suggesting a remedy for the Great Depression could be termed the Das Keynes problem. Many see the last work in a rivalry sense that Keynes broke from the classic school, but in the visionary sense Keynes continued to support Smith’s vision of capitalism. The established view is to consider his three works as an . . . inter-war trilogy that marks the development of John Maynard Keynes’s monetary thought from the quantity-theory tradition that he had inherited from his teachers at Cambridge; to his subsequent systematic attempt to dynamise and elaborate upon this theory and its applications; and, finally, to 181 M2829 - CATE 9781845424114 print.indd 181 21/12/2011 16:54 182 Keynes’s General Theory the...
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