John Maynard Keynes
Capitalist economies do not naturally self-correct to full employment. By showing how psychological uncertainty and aggregate demand drive investment, this framework revolutionized economic policy and justified government intervention to cure deep recessions.
Rejecting the classical belief that supply creates its own demand, the framework demonstrates that aggregate demand actually determines the total level of production and employment in an economy.
Markets do not automatically self-correct to full capacity, meaning an economy can remain stuck in a prolonged equilibrium of high involuntary unemployment without external stimulus.
The interest rate is determined by the public's desire to hold liquid cash due to future uncertainty, rather than simply acting as an automatic reward for saving.