The General Theory of Employment, Interest, and Money

Flashcards covering key concepts and ideas from John Maynard Keynes's 'The General Theory of Employment, Interest, and Money'.

The General Theory of Employment, Interest, and Money

A book by John Maynard Keynes that significantly changed economists' understanding of the capitalist system.

Loan expenditure

Public investment financed by borrowing from individuals.

Pyramid-building, earthquakes, even wars

According to Keynes, these may serve to increase wealth if they lead to loan expenditure that increases employment.

Gold-mining

Digging holes in the ground known as this adds nothing to real wealth but is acceptable due to traditional financial views.

Keynes's hypothetical solution to unemployment

Burying banknotes in disused coal-mines and allowing private enterprise to dig them up.

Gold

During slumps, the price of this tends to rise in terms of labor and materials, aiding eventual recovery.

Gold-mining

A practical form of investment because of its gambling attractions and the fact that increased stock of it does not diminish its marginal utility.

Ancient Egypt

They possessed pyramid-building and the search for precious metals, activities whose fruits did not stale with abundance.