The General Theory of Employment, Interest and Money by John Maynard Keynes, published in 1936, revolutionized economic thought. Keynes challenged classical economic theories, advocating for government intervention to stabilize economies during recessions. He introduced the concept of "effective demand" and emphasized the importance of aggregate demand in determining employment levels. Keynesian economics proposes active fiscal and monetary policies to mitigate economic downturns and achieve full employment. This seminal work reshaped economic policy and laid the groundwork for modern macroeconomic theory, influencing generations of economists and policymakers worldwide.
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