Keynes’s General Theory for Today
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Keynes’s General Theory for Today

Contemporary Perspectives

Edited by Jesper Jespersen and Mogens Ove Madsen

The themes of this important new volume were chosen to mark the 75th anniversary of the publication of The General Theory of Employment, Interest and Money. The distinguished authors concentrate on the relevance of this seminal publication for macroeconomic theory, method and the politics of today. This is particularly pertinent as similarities with the 1930s are striking in terms of unemployment, low growth, financial fragility and the European monetary union resembling the gold standard.
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Chapter 10: Keynes’s views in financing economic growth: the role of capital markets in the process of funding

Noemi Levy-Orlik


John Maynard Keynes rewrote the economic theory of his time and, more importantly, was highly concerned with economic policies to overcome unemployment. In terms of financing economic growth, we argue that Keynes had two versions, not entirely different, but in slight conflict, which prevented him from constructing a full and coherent explanation of the function of banks in financing economic growth and of capital markets’ role in the capitalist system. One vision can be found in the General Theory of Employment, Interest, and Money (hereafter GT), in which his main purpose was to convince his fellow economists of the lack of clarity of the mainstream assumptions and, as a result, their inadequate economic policies. In doing that, the role of capital markets was overemphasized. The other vision can be found in the post-GT papers and in his Treatise on Money, in which he expands the explanation of the functioning of the banking structure, highlighting the importance of bank money and the role of central banks in the banking structure.

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