The Keynes Effect and the Capital Market: A Methodological Note

ANY survey of the literature in money or income theory for the meaning and significance of the Keynes effect yields a variety of interpretations and conclusions.'Originally, J. M. Keynes, in the General Theory, spelled out a process by which wage-price deflation could possibly assist in achieving full employment through the interest rate and its effect on net investment,' and Hicks once interpreted this effect as part of the real balance effect.