Unit 3: Macroeconomic Policy

Lesson 16b: Monetary Policy - Other Monetary Policy Issues

Something Interesting - Why are we studying this?

From our textbook, p. 361: "During the early years of the Great Depression, many economists suggested that the economy would correct itself in the long run without government intervention. To this line of thinking, economist John Maynard Keynes remarked, “In the long run we are all dead!”" In this lesson we discuss why economists thought that the economy would achieve full employment in the long run and what Keynes meant when he said "In the long run we are all dead".

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