Crashes and the rules they brought · 1929–1950s
1936
Keynes's General Theory
John Maynard Keynes argues governments should spend to fight slumps.
In The General Theory (1936), Keynes argued that economies can get stuck with high unemployment and that government spending can lift demand. He also explained why people prefer to hold cash in uncertain times.
💡 Why it made sense then
Years of depression had shaken the belief that markets always recover quickly on their own.
Ideas it gave us
- 🌍 Fiscal policy
Fiscal policy is the government's use of spending and taxes to influence the economy. Spending more or taxing less stimulates growth; the reverse cools it.
- 🧾 Liquidity
Liquidity is how easily something can be bought or sold quickly without moving its price much.
Practise with $10,000 in play money
Free. No real money involved.