Keynes's Analysis of Economic Crises and Monetary Policy in the General Theory: Its Relevance after 75 years
- Taylor and Francis
- Publication Type:
- Journal Article
- Review of Political Economy, 2011, 23 (4), pp. 521 - 535
- Issue Date:
This paper argues that Keyness treatment of economic fluctuations and monetary policy in the General Theory is still relevant after 75 years. His treatment of severe economic crises provides considerable insight into the possibility of crises emanating from financial markets, and for understanding how financial disturbances may have real economic effects. Keyness insights into the potential limitations of using monetary policy to deal with periods of crisis and how these limitations may be addressed are also shown to be relevant to the recent global financial crisis. The paper also argues that the General Theory has insights to offer on the use of Taylor rules and on the possibility of addressing persistent unemployment.
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