Examining Keynes's legacy, 80 years on

The notion that governments can and should prevent depressions is a lasting influence of Keynesian thinking

In 1935, John Maynard Keynes wrote to George Bernard Shaw: "I believe myself to be writing a book on economic theory which will largely revolutionise - not, I suppose, at once but in the course of the next ten years - the way the world thinks about its economic problems." And, indeed, Keynes's magnum opus, The General Theory of Employment, Interest and Money, published in February 1936, transformed economics and economic policymaking. Eighty years later, does Keynes's theory still hold up?

Two elements of Keynes's legacy seem secure. First, Keynes invented macroeconomics - the theory of output as a whole. He called his theory "general" to distinguish it from the pre-Keynesian theory, which assumed a unique level of output - full employment.

Related: Keynes helped us through the crisis - but he's still out of favour