INTRODUCTION

The formal model to be found in The General Theory has been presented in the preceding chapters. This model was set in a particular interval of historical time, Marshall's short period, that Keynes adopted along with many other Marshallian tools of analysis. Keynes emphasised the historical time framework in which his analysis is placed by making a clear distinction between past, present, and future conditions. This analysis focused on current short-period equilibrium situations, in particular, on the factors determining the short-period equilibrium level of employment. This concentration on equilibrium values – even though they are only short-period and not long-period equilibrium values – partly takes his analysis out of historical time. Essential aspects of time are frozen in any equilibrium analysis, with even the values for variables that could change appreciably being kept constant in order to derive the equilibrium values of the variables of interest, given the assumed values for the independent variables. Any ‘movement’ towards these equilibrium values (such as the movement deduced from the analysis of the stability of the equilibrium position given by the intersection of the aggregate demand and supply functions) is a movement not through historical time but through analytical time, because the values for the parameters that determine the positions of these functions are assumed to be unchanged. This did not prevent Keynes from implicitly identifying actual values with these short-period equilibrium values. This is one instance where a reader should be aware of implicit assumptions.