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In 1935 while he was writing The General Theory of Employment Interest and Money John Maynard Keynes wrote to George Bernard Shaw I believe myself to be writing a book on economic theory which will largely revolutionise--not I suppose at once but in the course of the next ten years--the way the world thinks about economic problems1 Keynes was not wrong--The General Theory did cause a great change in economic thought It disproved many traditional beliefs about savings investment and especially unemployment The question can still be asked however to what extent Keyness General Theory was in fact revolutionary and to what extent was it based on the economic theories before it Some of the ideas presented in The General Theorycan be found in the writings of Malthus and Hobson and in the writings of more contemporary economists such as Knut Wicksell DH Robertson and Richard F Kahn Also the actions that Keynes in The General Theory argued were necessary to be executed by government had already been started in certain countries several years before The General Theory came out But even though many of Keyness individual ideas in The General Theory were not completely original Keynes was the first person to get them widely accepted and to use them to influence government policy In addition Keynes provided a much more general theory than had existed in the past by exposing assumptions of classical economists and he caused a great shift in emphasis to aggregates the short run and the problems of employment In these ways The General Theory was revolutionary The General Theory was published in 1936 The basic idea of The General Theory is that the equilibrium level of employmentwill depend on the amount of current investmentBut there is no reason in general for expecting it to be equal to full employment2 Investment is not the only factor that affects the equilibrium level of employment but it can be regarded as the most
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