Open Access“GENERAL THEORY” OF J.M. KEYNES: 80 YEARS AFTER
Author(s) -
Холопов Анатолий Васильевич
Publication year - 2016
Publication title -
vestnik mgimo-universiteta
Language(s) - English
Resource type - Journals
eISSN - 2541-9099
pISSN - 2071-8160
DOI - 10.24833/2071-8160-2016-3-48-163-171
Subject(s) - economics , orthodoxy , animal spirits , general theory , general equilibrium theory , keynesian economics , neoclassical economics , government (linguistics) , effective demand , state (computer science) , macroeconomics , positive economics , archaeology , algorithm , philosophy , psychology , social psychology , linguistics , computer science , history
The Keynes' "General Theory", published 80 years ago, overthrew the neoclassical orthodoxy and created a new understanding of how market economy works. The main idea of the "General Theory" is that the amount of employment depends on the level of effective demand. Keynes believed that much economic activity is governed by "animal spirits" because of the existence of inescapable uncertainty about the future. In Keynes' view these "animal spirits" are the main cause for economic fluctuations. The uncertainty and "animalspirits"make investments unstable. He made distinction between risk (which is measurable) and uncertainty (which is not). This is the reason why Keynes opposed the excessive mathematicization of economics. His another important impact on economics was to switch the focus of economic analysis from the long run to the short term. The message of "General Theory" was that government should manage demand to limit economic fluctuations. The role Keynes gave the state was essentially to reduce uncertainty and to make economy more predictable.