Emergence of Macroeconomics

Macroeconomics was considered to be a separate part of Economics after the publishing of General Theory of Employment, Interest and Money in 1936 by 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 are ready to function at their full capacity.

This theory did not hold good 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 emphasized the importance of unemployment and depression and their impact on the economy, this led to the evolution of macroeconomics as a separate branch of Economics.

This was all about the concept of Emergence of Macroeconomics which is a foundation topic for Commerce students. For more of such interesting and insightful topics, stay tuned to BYJU’S.

1 Comment

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