He argued that aggregate demand (total spending in the economy) determined the overall level of economic activity, and that inadequate aggregate demand could lead to prolonged periods of high unemployment, and since wages and labour costs are rigid downwards the economy will not automatically rebound to full employment. Keynes' intellect was evident early in life in 1902, he gained admittance to the competitive mathematics program at King's College at the University of Cambridge, where he went on to win Cambridge's prestigious Tomline Prize, awarded to the university's top mathematics student.ĭuring the Great Depression of the 1930s, Keynes spearheaded a revolution in economic thinking, challenging the ideas of neoclassical economics that held that free markets would, in the short to medium term, automatically provide full employment, as long as workers were flexible in their wage demands. His ideas, reformulated as New Keynesianism, are fundamental to mainstream macroeconomics. One of the most influential economists of the 20th century, he produced writings that are the basis for the school of thought known as Keynesian economics, and its various offshoots.
Originally trained in mathematics, he built on and greatly refined earlier work on the causes of business cycles. John Maynard Keynes, 1st Baron Keynes, CB, FBA ( / k eɪ n z/ KAYNZ 5 June 1883 – 21 April 1946), was an English economist whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments.
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