History 1807 Lecture Notes - Lecture 25: John Maynard Keynes, Franklin D. Roosevelt, Stock Market Crash
21 Apr 2016
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Stock market crash was result of speculation on wall street. Companies had more access to capital and used capital to enlarge productive capacity created impression that countries doing well. Money was poured just to productive output and not human resources/labour. Hoover didn"t respond to depression b/c believed was caused by crash. Led to spirals and essentially the great depression . John maynard keynes identifies fatal flaw w/ capitalist system. People are acting rationally but system isn"t correcting itself. Keynesian falls into disrepute in 1970s b/c people misunderstood what keynes is all about. Traditionally tendency to believe recessions were natural part of system (sense that you just have to wait it out) People were saving too much = insufficient $ for circulation and insufficient amounts of. Too much savings in economy means must lower interest rates to prompt people to invest in order to get them to release $
