Econ Essay #5 - 1 Trevor Erickson Econ Essay#5 Keynesian Economics Beginning in 1930 the heat of the Great Depression a British economist by the name of

Econ Essay #5 - 1 Trevor Erickson Econ Essay#5 Keynesian...

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Trevor Erickson Econ Essay #5 2/28/17 Keynesian Economics Beginning in 1930, the heat of the Great Depression, a British economist by the name of John Maynard Keynes started to develop a theory that has become one of the most influential ways of thinking in recent economic history. He sought to understand what had caused such a massive fiscal crash and how the global economy could recover. Keynes focused on the total spending within the economy and how it effects the total output and inflation in order to optimize performance and prevent any further disasters. In 1936, he went on to write his famous book The General Theory of Employment, Interest, and Money that explained his “demand-side theory.” As the years progressed some of his original, classic ideas have been revised to appropriately explain modern day economics that accounts for rapid changes in wages and prices; however, many of his ideas are still taken into consideration when discussing current practices. Two of the most important aspects of the Keynesian theory of economics are used to explain the rate of national unemployment, despite the real wages, and the correlation between personal and total savings in the economy; both of which heavily influence the stability of the national financial situation.

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