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Keynesian Revolution

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Abstract

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.

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Laidler, D. (2018). Keynesian Revolution. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_1254

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