TY  - JOUR
AU  - Darby,Michael R.
AU  - Lothian,James R.
TI  - Economic Events and Keynesian Ideas:  The 1930s and the 1970s
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 1987
PY  - 1986
Y2  - July 1986
UR  - http://www.nber.org/papers/w1987
L1  - http://www.nber.org/papers/w1987.pdf
N1  - Author contact info:
Michael R. Darby
John E. Anderson Graduate School of Management
University of California, Los Angeles
110 Westwood Plaza, Box 951481
Los Angeles, CA 90095-1481
Tel: 310/825-4180
Fax: 310/454-2748
E-Mail: michael.r.darby@anderson.ucla.edu
AB  - Keynes' General Th&ry was a brilliant attanpt to plain the paradox
of 1CM interest rates, ineffectual easy rn,netaxy policy, and lowinvestrtnt
during the Great Depression. We argue that Keynes' failure to distinguish
between low naninal and high real interest rates led hint to misinterpret a
tight and ail too effective nonetary policy and unnecessarily hypothesize
a downward shift in investhent dnand. Keynesian ideas in tux profoundly
influenced econanic policy in the 1960s and 1970s. The resulting postwar
inflation -- rather than scholarship on what actually happened in the
1930s -- appears to be the primary reason for the waning influence of the
ideas derived frcin the General Theory.
ER  -