The General Theory and the Current Crisis:
A Primer on Keynes’ Economics

A D&S Article Series by Alejandro Reuss

• Introduction: The Revolutionary Who Wasn’t

  As “revolutionary” a figure as Keynes was in the history of economic thought, he was, in another sense, a profoundly anti-revolutionary thinker. Read more »

• Part I: Fiscal Policy and “Crowding Out”

  Conservative economists argue that the massive government spending required for fiscal stimulus “crowds out” private spending. What was Keynes’ response? Read more »

• Part II: Keynes and the Limits of Monetary Policy

  Keynesian economists, believing that monetary policy is not adequate to pull the economy out of its current crisis, have argued especially for a dramatic increase in government spending as the surest way to revive overall spending, production, and employment. Read more »

• Part III: Keynes, Wage and Price “Stickiness,” and Deflation

  Did Keynes think that ‘sticky’ wages and prices were the cause of depressions? No. Did he think falling wages and prices could be the solution? No again. Part III explains Keynes’ argument that deflation—far from being the cure that orthodox economists claim—is likely to deepen economic depressions. Read more »

• Part IV: Bubble, Bubble, Toil, and Trouble: Keynes and Financial Instability

  In The General Theory, Keynes argued that financial-market instability was due not merely to some “wrong-headed propensity” on the part of the individuals involved, but to the organization of financial markets themselves. Read more »