The Great Depression
نویسندگان
چکیده
This paper is about the explanation of the Great Depression given in Keynes’ General Theory. There are two key ideas in this book that set it apart from pre-Keynesian economics: The first is that there is something distinctive about the labor market that makes the marginal disutility of labor different in general from the real wage. The second is that aggregate economic activity is determined by the ‘animal spirits’ of investors. This paper preserves both of these ideas, modified in a way that respects recent developments in dynamic general equilibrium theory.
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