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p. 794. The General Theorylocked

  • Robert Skidelsky


The General Theory added to the field of economics for the first time a theory of demand and supply for output as a whole. Keynes showed that if demands falls short of supply, then output must run down to bring them back into balance. This notion explained the slump and how to escape from the slump. ‘The General Theory’ examines the importance of Keynes's magnum opus and what it had to say about a variety of aspects of economic activity. The most profound question posed by Keynes's work was: is it money that causes the economy to misbehave, or is it uncertainty? Between these two ideas sits the theory of monetary policy.

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