John Maynard Keynes
Capitalist economies do not naturally self-correct to full employment. By showing how aggregate demand, uncertainty, and investment shape output, this book recast economic policy and argued for government intervention during deep recessions.
Rejecting the classical belief that supply creates its own demand, the framework argues that aggregate demand 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 an equilibrium of high involuntary unemployment without outside stimulus.
The interest rate is determined by the public's desire to hold liquid cash under uncertainty, rather than simply acting as an automatic reward for saving.