Introduction to Modern Mainstream Macroeconomic Thought Versus Keynes’ Views on Recoveries from Recessions

An introductory chapter, this chapter offers brief overviews of three of the major schools of macroeconomic thought to provide some context for this book. Regarding the major schools of thought, this chapter focuses on the classical school of thought, the Keynesian school of thought, and the monetarist school of thought. With an emphasis on how decreases in aggregate demand could cause downward breaks in U.S. real GDP and employment, this book would best be categorized in the Keynesian school of thought. In contrast to mainstream macroeconomic theory, this chapter also discusses Keynes’ view in The General Theory of Employment, Interest, and Money where economies could reach equilibrium at less than full employment and remain there for longer than the short term. Additionally, this chapter offers a short overview of the remainder of the book.