Lectures on John Maynard Keynes' General Theory of Employment, Interest and Money (4): Chapter 4, 'The Choice of Units'; Chapter 5, 'Expectations as Determining Output and Employment'

Abstract

In Chapter 4 of the General Theory, Keynes discusses the units of measurement he will be using in the remainder of the book, in particular his reason for measuring in nominal rather than real terms, objection to aggregate measures of real output and physical capital stock, and his concept of wage units, which is a source of difficulty in following bits of the later exposition. Chapter 5 introduces expectations and discusses the role of short run expectations in determining the behavior of firms and of economic aggregates.