The Global Crisis of 2008 and Keynes's General Theory

Abstract

Some interpretations restrict the applicability of the General Theory to modern capitalism because of the financial institutions assumed by Keynes. Although acknowledging some evidence in support of these interpretations, the paper argues that Keynes also developed the fundamental elements of a general theory of unemployment and potential instability under capitalism, without having clearly disentangled these elements from more institutionally specific ideas. Such a general theory applies to all types of capitalist economy, but still is institutionally specific, referring to capitalism. The paper extracts this more general message, which was partly obscured by Keynes's emphasis on modern financial institutions. [ABSTRACT FROM AUTHOR].