Research Of The Balance Between Potential Demand And Effective Demand

In the 1930 s, capitalist world occurred the most serious, the most lasting, the most widely economic crisis throughout history. And national governments took expansionary economic policies to cope with the rapid decline of the economy,leaded their economies out of recession. In 1936, the publish of Keynes’ s <The General Theory of Employment, Interest and Money>,provided a theoretical basis for governments widely in-depth implementation of state intervention and regulation of the national economy, completed the transition from the classical economics theory to the Keynesian economics theory. Keynesian theory became the mainstream economics and widely used by governments from then. But since 90 s, the Japanese occurred economic bubble, Japanese government had adopted a series of Keynes economic stimulus measures, they can’t make the economic recovery, if their Decision is wrong or Keynesian policy itself is a failure? To solve the question, along the steps of Keynesian’s lack of effective demand, this paper from the perspective of world economic history, to try to discuss the premise assumptions of effective Keynesian positive economic policy.Keynesian had recognized the developed countries’ supply ability had surpassed the total demand, they focused on the shortage problem of effective demand, and then put forward the policy measures to solve the problem of insufficient effective demand——stimulate investment demand, because consume demand was relatively stable. That is, shortage investment demand take down aggregate demand, so as to affect the economy. As if in Aggregate Demand=Consume Demand+Investment demand, consume and investment are independent. This article suggests that, the consume demand of depression is not stable, the apparent shortage investment demand caused by decrease of consume demand. Observe from the perspective of aggregate supply, the shortage of consume demand is the relative surplus of finished products, means products didn’t be sold, and investment can’t increase。According to the idea of Keynesian economics, effective demand is realized aggregate demand, the number is equal to GDP. This paper think the influence factor of investment demand is consume demand under the condition of closed, assuming relative sufficient aggregate demand is “potential demand”, discuss from the perspective of quantitative, short-term “potential demand” of the current period of at least equal to that of the previous high GDP recently.(Involved in the long-term national income distribution structure optimization problem, limited to space outdiscussion.) In this way, for the current “adequate and inadequate effective demand”should not judge only from the perspective of the current real GDP, but come to conclusions based on the balance between the potential demand and effective demand.Through analyzing balance between the potential demand and effective demand of the world’s major developed countries, we discover when the balance between the potential demand and effective demand is very big——effective demand is not enough, IS-LM model’s derivative positive economic policy is effective. On the contrary, when the balance between the potential demand and effective demand is too small(effective demand is basically enough), close to 0 and negative(effective demand is enough), IS-LM model’s derivative positive economic policy is not effective.