title of book by John Maynard Keynes (1883-1946) outlining the general concept of Keynesian economics. The book was published in 1936.
*Context*
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Prior to the Great Depression, opinions about how to properly manage the economy were dominated by Neoclassical economics, which advocated little government intervention. In particular, unemployment was regarded as the consequence of workers failing to accept wages sufficiently low to permit full employment.
During the Great Depression, unemployment soared to 25% in the USA and Germany. Economics had no advice to give to leaders anxious to do something, and none of the neoclassical predictions were coming true. The government of the UK commissioned J.M. Keynes to lead a commission of top British economists in a general review of economic theory; their finding were summarized by Keynes in *The General Theory*.
*The Findings*
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The Cambridge team did not have access to statistics of national income and product accounting (NIPA). They did have some data on unemployment and prices, especially from the USA.
Keynes also identified several inherent logical problems with neoclassical economic theory about saving and investment. The theory said that all economic output of an economy would tend to be consumed; all saving would be invested; and all workers would be employed, *provided wages fell low enough*.
Keynes noted the economic mechanism by which investment occurs has little to do with the existing rate of saving; both are influenced by interest rates, but other forces come into play (e.g., liquidity preference for saving, business opportunities and user cost for investment). Hence, aggregate demand can drift very far out of alignment with output (or potential output).
Another finding was that employment rates actually did not respond in a predictable way to the fall in wages. The US economy suffered periods when a reduction in the wage level lead to increases in employment, despite the assumption that workers would have withdrawn from the labor market.
Finally, Keynes proposed the use of monetary policy and fiscal policy for regulating business cycles.
*Context*
______________________________
Prior to the Great Depression, opinions about how to properly manage the economy were dominated by Neoclassical economics, which advocated little government intervention. In particular, unemployment was regarded as the consequence of workers failing to accept wages sufficiently low to permit full employment.
During the Great Depression, unemployment soared to 25% in the USA and Germany. Economics had no advice to give to leaders anxious to do something, and none of the neoclassical predictions were coming true. The government of the UK commissioned J.M. Keynes to lead a commission of top British economists in a general review of economic theory; their finding were summarized by Keynes in *The General Theory*.
*The Findings*
______________________________
The Cambridge team did not have access to statistics of national income and product accounting (NIPA). They did have some data on unemployment and prices, especially from the USA.
Keynes also identified several inherent logical problems with neoclassical economic theory about saving and investment. The theory said that all economic output of an economy would tend to be consumed; all saving would be invested; and all workers would be employed, *provided wages fell low enough*.
Keynes noted the economic mechanism by which investment occurs has little to do with the existing rate of saving; both are influenced by interest rates, but other forces come into play (e.g., liquidity preference for saving, business opportunities and user cost for investment). Hence, aggregate demand can drift very far out of alignment with output (or potential output).
Another finding was that employment rates actually did not respond in a predictable way to the fall in wages. The US economy suffered periods when a reduction in the wage level lead to increases in employment, despite the assumption that workers would have withdrawn from the labor market.
Finally, Keynes proposed the use of monetary policy and fiscal policy for regulating business cycles.
The *The General Theory of Employment, Interest, and Money* completely shook up the world of economic policy. Hereafter, governments took responsibility for economic conditions or they lost power.
by Abu Yahya March 3, 2009
Get the The General Theory of Employment, Interest, and Money mug.Researched intensively at a mid-sized public university in 2003, the Orbit Theory was established to explain the symbiotic relationship of when a large, unattractive female associates frequently with several highly attractive females or 'Bettys'. Quite simply, the attractive females have someone to complain to about typical problems, i.e. "Guys are assholes", "I'm ragging hard today", or "My V.D. won't clear up." The asthenically challenged female also provides a 'worst-case scenario' for the buxom women, as they know that life could be much worse if they looked like their dumpy little counterpart. However, the stout little fuggly stands to gain quite valuable aspects by hanging out with the attractive hotties: she may be able to see more suitable men, gain confidence by having smoking hotties as friends, be invited to fancier shindigs and box-socials, and become a BJ Queen for the men which cannot achieve coitus with said hotties. The mutual benefit for both parties is similar to celestial bodies which use their gravitational pull to prevent smaller moons from wondering into space...hence "Orbit" Theory; one large body benefiting from several smaller bodies surrounding itself and maintaining a gravitational pull in its orbit.
Four strikingly attractive women enter a local pub, in search of alcoholic beverages. Suddenly, at the end of the Betty trail is a stout female, no taller than 5'5" and a tanned face eerily similar to that of a tanned Pillsbury Doughboy. The last female entering the bar would complete the "Orbit Theory" equation: 3 or > #(Hotties)+1(Oompa Loompa or 'M&M')= The Orbit Theory
by 4 Amendment Rights March 3, 2009
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1.(n) -The non-scientific theory that the presence or lack of a characteristic in a population can be divided along 90% to 10% lines.
1)90% of people are morons
2)only 10% of life is worth living
3)90% of people who post on this site are complete and utter retards
4)Only 10% of people are worth knowing
5)Only 10% of people give a fuck about the societies they live in
6)90% of women aren't attractive. same for guys.
7)10% of the population uses 90% of our resources
8)there's a 90% chance someone will find something in this offensive
2)only 10% of life is worth living
3)90% of people who post on this site are complete and utter retards
4)Only 10% of people are worth knowing
5)Only 10% of people give a fuck about the societies they live in
6)90% of women aren't attractive. same for guys.
7)10% of the population uses 90% of our resources
8)there's a 90% chance someone will find something in this offensive
by Damoclese July 22, 2004
Get the The 90% Theory mug.The theory formulated by astronomer Nicolaus Copernicus, in which the Sun revolves around a relatively stationary Neha at the center of the Solar System.
by NXOXO May 4, 2013
Get the The Neha Theory mug.In the summertime it's kinda hard to figure out if a girl is hot or not because her sunglasses cover most of the face. To devide the hot and ugly girls you just need to see who's keeping the sunglasses on for the longest time for instance in the evening.
Mid day
#1,#2 - Oh, that girl look's really hot!!
Evening
#1 - Probably not, she's still got her sunglasses on..
#2 - yeah..the sunglass theory...damn it!
#1,#2 - Oh, that girl look's really hot!!
Evening
#1 - Probably not, she's still got her sunglasses on..
#2 - yeah..the sunglass theory...damn it!
by hvemerdennekarenmedsekkogluepå April 19, 2010
Get the The Sunglass Theory mug.Based on How i met your mother's 11th Episode of 6th Season
300 years ago sailors stuck at sea would get desperate at sea for female comapionship, it got so bad that manatee out in the water started to look like beautiful womens, mermaids.
Every women no matter how initially repugnant have a mermaid clock, its the time it takes for you to bone her. sure today you see her as a manatee but she aint gonna stay that way.
300 years ago sailors stuck at sea would get desperate at sea for female comapionship, it got so bad that manatee out in the water started to look like beautiful womens, mermaids.
Every women no matter how initially repugnant have a mermaid clock, its the time it takes for you to bone her. sure today you see her as a manatee but she aint gonna stay that way.
by arv1e December 8, 2010
Get the The Mermaid theory mug.If one's beard extends past certain parameters of length and neatness, it's length can represent the magnitude of their emotional barriers.
The Beard Theory was initially rejected by Urban Dictionary editors because they had beards that exceeded the acceptable length. The Beard Theory states that their beards created an emotional barrier between them and the previous submission, therefore allowing them to reject it so willingly.
by By and Large March 19, 2015
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