The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Keynesian Revolution

  • David Laidler
Reference work entry


The term ‘Keynesian Revolution’ suggests that Keynes’s General Theory (1936) overthrew a defective and discredited classical orthodoxy and created a new understanding of how economies work. However, Keynes’s critique of earlier work seriously misrepresented it, and his new system was, in fact, a synthesis of components drawn from it. Keynes’s analysis nevertheless embodied an original and radical vision of how a monetary economy functions. The widespread adoption of the IS–LM interpretation of his system began a process of obscuring that vision, and economics has now largely lost sight of it.


Beveridge, W. Effective demand Expectations Fisher, I. Great depression Hansen, A. IS–LM model Kahn, R. Keynes, J. M. Keynesian Revolution Keynesianism Klein, L. Leijonhufvud, A. Liquidity preference Macroeconomics, origins and history of Malthus, T. Marginal efficiency of capital Marginal propensity to consume Mill, J. S. Monetarism Multiplier New Classical revolution New Deal Pigou, A. Rate of return over cost Ricardo, D. Robinson, J. Say’s Law Underemployment equilibria Warming, J 

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • David Laidler
    • 1
  1. 1.