Edited by Sheila Dow, Jesper Jespersen and Geoff Tily
Chapter 2: Keynes applied
In June 1931 Keynes wrote of the ‘prodigious and incredible’ investment activity in the United States: It seems an extraordinary imbecility that this wonderful outburst of productive energy should be the prelude to impoverishment and depression. Some austere and puritanical souls regard it both as an inevitable and desirable nemesis on so much over-expansion, as they call it; a nemesis on man’s speculative spirit . . .. I do not take this view. (Keynes [1931b] 1973, p. 349) His primary concern was to sustain the boom, not repair the bust. Ultimately the world crisis was catalyst to a theoretical scheme which formalised this insight and provided the practical means to its realisation.
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