MaXLab - Faklutät für Wirtschaftswissenschaften. European Central Bank. Nobelprize.org. The Keynesian Model. In 1936 John Maynard Keynes published his General Theory of Employment, Interest and Money. Keynes, whose earlier work had made him one of the world's most respected economists, offered a new framework for approaching the questions of recession and unemployment. Arriving at a time in which most economists seemed confused about the state of economic affairs, the book revolutionized thinking about macroeconomics questions, sweeping before it the old business-cycle framework and the quantity theory of money. There is controversy about what Keynes really meant, but this controversy is of no importance to us.
Although some economists argue that the development of "Keynesian" economics in the 1940s and 1950s involved distortions of the true message of Keynes, it is these developments that had become the conventional wisdom of economics by 1965.