Keynesian Overview of Interest rates.greenspun.com : LUSENET : Economic History (and Related Observations) : One Thread
I have an assignment on economic theorists and their beliefs regarding a current event, in this case interest rates. If anyone could help me out with an overview of Keynes' beliefs regarding interest rates ( reasonably in-depth) without me having to read The General Theory, this would be much appreciated! Also the beliefs of John Kenneth Galbraith and Adam Smith.
-- Anna Wallis (email@example.com), July 03, 2002
KEYNES CONCLUDED THAT WHEN THE ECONOMY REACHES A CONDITION IN THAT THE POPULATION EXPECTATIVES ARE NEGATIVE THEY TEND TO STICK TO THEIR MONEY AS IT WAS THEIR LAST RESORT, NAM,ED IT THE "LIQUIDY TRAP". WHEN THIS SITUATION OCCURS ( 1930 TO 1936 ?!) MONEY OFFER DOES NOT MEANS ANYTHING, BECAU SE ALL MONEY THAT THE CENTRAL BANK INJECTS PEOPLE WILL RETAIN, AS THEY ARE AFRAID TO SPEND IT. THE ONLY WAY OUT OF IT IS THE GOVERNMENT ACTS CREATING JOBS, SPENDING OPENING NEW AREAS AND OPPORTUNITIES OF WORK, CHANGING THE NEGATIVE EXPECTATIVES OF CONSUMERS AND INVESTORS. tHIS IS JUST AN IDEA.
-- JOAO FRANCISCO DE AGUIAR (JF.AGUIAR@UOL.COM.BR), May 07, 2004.