What Were the Contributions of John Maynard Keynes?
Economist John Maynard Keynes made many contributions to the field of macroeconomics including his inflation theory, stance against Say's Law, unemployment thoughts, borrowing during the recession theory, belief in government and private sector boosts and view that the government should be involved on a major level in regards to economics. Keynes was an incredible influence in the field of economics, and there is an entire school of thought around his influence known as Keynesian economics.
Keynes's inflation theory follows the idea that if an investment is greater than the savings involved, then inflation will occur. If the savings involved are greater than the investment involved, then a recession will occur. Keynes believed that during an economic depression, the only way to change the outcome was to encourage the idea of spending money and to discourage the idea of saving it.
Keynes was also against Say's Law. Say's Law states that supply creates demand, and that the more supply there is, the more demand there will be. Keynes believed that it was actually the demand that created the supply.
Keynes also believed that the government plays a vital role in the economy whether or not the government realizes this role or not. The government could boost the economy by putting money into circulation when there was a recession. It could do this by borrowing, and then when the economy had recovered, the government could pay the loans back without any repercussions.