Chapter 8: 88-90

By the 1930’s, growth in the field of economics seemed to have halted. Economists were stuck on the same subjects, unable to move forward. The economists of this time were very “literary” and didn’t deal much with mathematics. Then the “Modern Program” and John Maynard Keynes began to change economics. The Modern Program was a “shared determination to supplant the ambiguities of verbal reasoning with more rigorous methods.” With Einstein and other prominent scientists flocking to America, economists began to see the possibilities of science and the tools it gave them. Economists then began using “mathematical methods and formal logic” over their old ways. Keynes, while trying to save industrial capitalism and unlock the mysteries behind the Great Depression, unwittingly created a revolution. He discovered macroeconomics, something people at first thought strange because it was so different than microeconomics. With the discovery of macro there came a new “conviction;” the fields of microeconomics and macroeconomics couldn’t be accepted unless they became unified. This led to the building of macro phenomenon on the foundation of micro’s behavior of individuals.