Economics 314

Macroeconomic Theory

Spring 2014

Jeffrey Parker, Reed College

 

January 31 "paper" of the week

Assigned paper

Keynes, John Maynard. 1936. The General Theory of Employment, Interest and Money. Chapters 8 through 10.

Reading suggestions

  • There is very little math in these chapters, but that does not make them easy reading! Keynes uses terminology that was non-standard in his day, and even some of the standard terminology of the 1930s is archaic today.
  • You may refer to other chapters of the book for clarification if you think that is helpful.

Questions for analysis

  1. We used a very simple representation of Keynes's consumption function in equation (2) of coursebook Chapter 2. To what extent does this equation accurately reflect Keynes's theory of consumption?
  2. What aspects of Keynes's ideas about consumption spending are ignored in equation (2)? Are these things important? Would the multiplier process be substantially different if they were included?
  3. What parts or aspects of these chapters did you find difficult to understand? What parts or aspects were most transparent to you?