THE LOGICAL FOUNDATIONS OF KEYNES’S REAL-WORLD ANALYSIS

ABSTRACT. This paper presents a review of the literature on Keynes’s revolutionary monetary theory, his understanding of the instability of investment decisions, and his deployment of exogenous long-term expectations. Thus, the overall results provide strong evidence for Keynes’s speculations about the weakness of monetary stabilizing measures, his theory of involuntary unemployment, and the importance of psychological propensities in analyzing the economic consequences of human behavior. These findings are consistent with a number of prior observations. pp. 220–225
JEL: E42, G11, J21, J54

Keywords: Keynes, monetary theory, unemployment, psychological factors