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Keynes's Analysis of Economic Crises and Monetary Policy in the General Theory : Its Relevance after 75 Years

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  • Peter Docherty

Abstract

This paper argues that Keynes's treatment of economic fluctuations and monetary policy in the General Theory is still relevant after 75 years. His treatment of severe economic crises provides considerable insight into the possibility of crises emanating from financial markets, and for understanding how financial disturbances may have real economic effects. Keynes's insights into the potential limitations of using monetary policy to deal with periods of crisis and how these limitations may be addressed are also shown to be relevant to the recent global financial crisis. The paper also argues that the General Theory has insights to offer on the use of Taylor rules and on the possibility of addressing persistent unemployment.

Suggested Citation

  • Peter Docherty, 2011. "Keynes's Analysis of Economic Crises and Monetary Policy in the General Theory : Its Relevance after 75 Years," Review of Political Economy, Taylor & Francis Journals, vol. 23(4), pages 521-535, October.
    • Handle: RePEc:taf:revpoe:v:23:y:2011:i:4:p:521-535
    DOI: 10.1080/09538259.2011.611617
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    References listed on IDEAS

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    1. M. G. Hayes, 2006. "The Economics of Keynes," Books, Edward Elgar Publishing, number 12601.
    2. Milgate, Murray, 1983. "Capital and Employment," Elsevier Monographs, Elsevier, edition 1, number 9780124962507 edited by Eatwell, John.
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    Cited by:

    1. Giancarlo Bertocco & Andrea Kalajzic, 2014. "The liquidity preference theory: a critical analysis," Economics and Quantitative Methods qf1402, Department of Economics, University of Insubria.
    2. Kosta Josifidis & Alpar LosÌŒonc, 2014. "Some Thoughts on Power: International Context," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 61(5), pages 597-615, October.
    3. Giancarlo Bertocco, 2013. "Money as an Institution of Capitalism: Some Notes on a Monetary Theory of Uncertainty," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 42(1), pages 75-101, February.
    4. Peter Docherty, 2012. "Keynes’s General Theory, the Quantity Theory of Money and Monetary Policy," Chapters, in: Thomas Cate (ed.), Keynes’s General Theory, chapter 6, Edward Elgar Publishing.

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