The General Theory of Employment, Interest and Money - Book Review Essay Sample

The early 20th century was a time full of desperation. The states economies were in a struggle and a period of depression, most had fear of a possible financial downfall. It was a period in 1936 when John Maynard Keynes made his publications of his renown and works of impact, The General Theory of Employment, Interest, and Property. It was an exposition elaborating certain macroeconomics opinions; it was one that would make a chord with many characters that it resulted in the foundation of the economic growth that has later been renowned as Keynesian Economics. Through his book, "The General Theory of Employment, Interest, and Money", he shows his knowledge of finance, especially macroeconomics and has contributed to making him one of the renowned and diverse proficient learned economist in the current account.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Order now

Comprehending and giving a concise overview of "The General Theory of Employment, Interest, and Money" basing on the chapter by chapter needs familiarity in microeconomics and the distinction from the different fields of finance microeconomics (Asimakopulos, n.d). Macroeconomics' relates to the evaluating of output in the market, involving marketing trading, demand and supply, and the trading patterns whereas macroeconomics deals with aspects such as inflation, unemployment, balance payment, rates as well as the nation's total output and incomes. The most important aspect to understand is that macroeconomics is a state output and relates well to the idea of the gross national product (GNP), which is the whole value of commodities in produce in the economy measured in a specific time period like yearly. The final economic activity valued in a country is known as the final demand, which is as a result of the factors such as spending, investments, consumption, and exports.

John Keynes work in the 1930s initiated the investigations in macroeconomics as economic innovations. His concepts are an in-depth of aspects such as interests, employment as well as money supply. Amidst this concept, he lays his emphasis on unemployment and its effects in his study, he uses key statements from "The General Theory of Employment, Interest, and Money" ... the existing law on unemployment garbage. In the crisis... there was no wage so mean that it could eradicate unemployment. It was accordingly evil to lay guilt on the jobless for their predicament. The recommended proposition that followed was an alternate definition of the source of lay-off and inflation. This majored the noted demand-that is the gross expenditure of consumers, business investments. If aggregate demand was low, sales and works were affected.

The concepts were well inscribed in distinct chapters of the book. Before its publication, unemployment was defined very conversely. Existing conditions at the period affirmed the labor business rigidity blocked employment wages from collapsing to a stage at which the employment demand would be equal. It was reachable when the individuals searching jobs had achieved bid down the salaries to the stage that others either exited the labor market completely or more employers become more interested to provide more employment opportunities, as lower earnings would multiply the probable profitability of hiring more labor. Keynes makes arguments against the existing theory in certain chapters (The General Theory of Employment, Interest and Money, 2017). He makes a theory on the nagging unemployment may well be as a result of inadequate demand for the manufacturing of commodities. This progress is against to the concept that unemployment is single rooted in labor market fluctuations. He further makes the theories on the definition of the lack of demand was in the collapse of scheduled investment to match saving schedule.

John Keynes' effectiveness that was referred to as the "good market" may be at lay-off stability like that it wasn't confirming equilibrium in the employment fair, resulted in actually a mixture amidst bankers (Chan, 2017). In such an employment market, job providers would not create employment opportunities to the stage where it may have been beneficial for them to implement had the relevant request for their performance to be available. The idea of lay-off equipment was created and explained by Keynes alongside other economies in the period that succeeded the "The General Theory of Employment, Interest, and Money" publication (Davidson, 2007).

The Keynesian concept on demand as an important determinant of the performance spiced more advancement in associated macroeconomic fields. It was accountable for the state income responsibility. In state income accounting, the parts of GNP usage, net exports, funding. As well as the government expenditure measured. The money supply theory is a point of discussion among Keynes and standard financial scholars. In his publication summary and analysis, John tries to clarify the major argument against him is posited by the monetarist.

There were more arguments between Keynesians and monetarists as it related dynamics in the funds' accumulation and their impacts on job yield. Keynes suggests the addition of the money supply is prone to minimizing the interest rates. What follows, investments and gross demand are multiplied. Therefore, the theories on single means to minimize unemployment are by the addition of the money supply. He makes the theory conditional where in case the workforce is underemployed, the sort of additional expenditure would result in more performance and yield rise in employment. In countering this, monetarists bitterly disagree, due to their knowledge of finance causes them to trust that this addition of capital stock would be responsible for buildup for a long period of experience. In the manner of writing, Keynes makes a revelation on the impacts on the universal economic policy of his treatise. "I believe myself to be writing a book on economic theory which will largely revolutionize-not, I suppose, at once but in the course of the next ten years-the way the world thinks about economic problems."

The "General Theory of Employment, Interest, and Money" was not completely unprecedented in some ways (Davidson, 2007). For instance, conclusions suggested by Keynes were new techniques of creating employment levels, very distinct from those of many economists, which were applicable to the policies by government. Keynes was forced to make a publication on the comprehensive plan due to the standard definition of a crisis, which had already been initiated in England in the 1920s, distinct more from the plans formulated by Keynes believed required to reduce inflation. The last chapter in the comprehensive theory by Keynes makes an emphasis on the government actions to solve unemployment. Keynes suggests that the government should intervene so as to ensure demand is enough after the trend in a crisis is targeted to reduce interest, which is shown in the reduced investments. He articulates, "The State will have to exercise a guiding influence on the propensity to consume partly through its scheme of taxation, partly by fixing the rate of interest, and partly, perhaps, in other ways. Furthermore, it seems unlikely that the influence of banking policy on the rate of interest will be sufficient by itself to determine an optimum rate of investment. I conceive, therefore, that a somewhat comprehensive socialization of investment will prove the only means of securing an approximation to full employment."

Even after his death, John Keynes' concepts have existed for years. Their approval in the post-world war II condition of the economy also referred to as Keynesian reconstruction and their consequent explosion to stagflation in the late 20th century was not able to yield Keynesian business. Although the principles are endorsed in still in use up to date, they have been modified to suit need by economists at present. Some markets, succeeding the seeming falling of Keynes business in the 1970s, were highly reluctant to use the Keynes' job principle. The disagreements in regards to Keynes were simply centered around the trust on the adverse effects that economics associated with the Keynesian could have on budgets supporting and the motivations of a boom. During the 1970s boom case, still fresh in some people's minds, the mindsets of the monetarists was a different change for an economic system. The concept has been taken forward that Keynesian economics were their own profit victims. The objective of the Keynesian economics is the merging of neoclassical economics with various of Keynes' conclusive suggestion in regards to economic policy (The General Theory of Employment, Interest and Money, 2017). It is conceptual of distinction and linkage between microeconomics base and macroeconomics ideas and management. However, his concepts have been doubted and almost ignored; John Keynes' concepts are yet a discussion question and are practiced in the 21st C policy of economics.

References

Asimakopulos, A. (n.d.). The General Theory of employment. Keyness General Theory and Accumulation, 25-57. doi:10.1017/cbo9780511522079.005

Chan, y. (2017). Theory of employment: Keynes & Pigou. S.l.: Open Dissertation Press.

Davidson, P. (2007). There Are Major Differences between Kalecki's Theory of Employment and Keynes's General Theory of Employment, Interest, and Money. Interpreting Keynes for the 21st Century, 169-189. doi:10.1057/9780230286559_16

The General Theory of Employment, Interest and Money. (2017). doi:10.4324/9781912281138