Macroeconomics was considered to be a separate part of economics after the publishing of General Theory of Employment, Interest, and Money in 1936 by the British economist, John Maynard Keynes.
The classical approach was of the view that there will always be full employment as long as there were workers who were willing to work and factories that were ready to function at their full capacity.
This theory did not hold well in the Great Depression of 1929 as there were large numbers of job cuts in North America and Europe following the Great Depression. The same also had an impact on other nations of the world.
The Great Depression resulted in many factories lying idle, workers out of work. In the years following the Great Depression, the unemployment rate in the USA (United States of America) went up to 25%.
It was then that Keynes, who emphasised the importance of unemployment and depression and their impact on the economy, led to the evolution of macroeconomics as a separate branch of economics.
This was all about the concept of ‘Emergence of Macroeconomics’. For more of such interesting and insightful topics, stay tuned to our website.
|Important Topics in Economics:|