Cycles and slumps in an overly aggregated theoretical framework

Keynesian theory is a set of mutually reinforcing but jointly questionable propositions purporting to show how, in a market economy, a few excessively broad macroeconomic aggregates play off against one another. The writing style of TheGeneral Theory,coupled with its poor organization and seeming conflict with Keynes’s earlier writings, has subjected academic economists to years of conflicting interpretations of Keynes’s message. Meanwhile, policymakers, seeing the short-run advantage to fiscal and monetary stimulation, have been quick to adopt Keynesian thinking. And finally, the lessthansatisfactory performance of the so-called mixed economies has allowed for differing opinions among the electorate about whether the Keynesianizedeconomy’s lackluster performance has been bolstered or hamperedby Keynesian policies.