Summary: Is our prosperity derived from a continual circular flow of spending? Is it impossible for a society to increase it’s total savings? Can deficit spending by a government step in to replace private activity in order to maintain full employment and restore lasting economic growth? What is a liquidity trap and what does it mean for the economy? What did Keynes really mean by “in the long run, we’re all dead”? In this EconStories mini-documentary, we explore the foundations of Keynesian economics with Keynes most famed biography, Lord Robert Skidelsky. In the next episode, we’ll dig deeper into some of the most controversial aspects of Keynesianism including the notion that ditch digging or world war could provide a pathway to economic recovery and prosperity.
