Keynes’s Theories of the Business Cycle: Evolution and Contemporary Relevance

This paper traces the evolution of John Maynard Keynes’s theory business cycle from his early writings in 1913 to policy prescriptions for control fluctuations 1940s. The identifies six different “theories” fluctuations. With theoretical frameworks a 30-year span, driver fluctuations—namely cyclical changes expectations about future returns—remained substantially same. banking system also played pivotal role throughout versions, by financing and influencing behavior return expectations. There are four major theories: a) saving–investment framework understand economic fluctuations; b) capabilities moderate cycle; c) effectiveness monetary fine tune through short-term interest rate or credit conditions; d) comprehensive fiscal investment attenuate Finally, some conclusions drawn present relevance mix Keynes promoted ensuring macroeconomic stability.