Attention Quote by John Maynard Keynes
“Nevertheless, if we contemplate a society with a somewhat stable wage-unit, with national characteristics which determine the propensity to consume and the preference for liquidity, and with a monetary system which rigidly links the quantity of money to the stock of the precious metals, it will be essential for the maintenance of prosperity that the authorities should pay close attention to the state of the balance of trade. For a favourable balance, provided it is not too large, will prove extremely stimulating; whilst an unfavourable balance may soon produce a state of persistent depression.”
About This Quote
Source Book: The General Theory of Employment, Interest and Money, John Maynard Keynes, 1936
Keynes argues that a stable wage system, national consumption habits, and a money supply tied to precious metals make trade balance crucial for prosperity; a modest surplus boosts the economy, while a deficit can cause prolonged recession.
In simple terms: Trade balance is vital for economic health; a small surplus helps, a deficit harms.
Key Takeaway
Monitor and aim for a modest trade surplus.
Themes
economics
trade
monetary policy
prosperity
inflation
Mood
analytical
concerned
strategic
Type
theoretical
policy-oriented
When to use this quote
- government fiscal planning
- business export strategies
- investment decisions
- policy formulation
- economic forecasting
Key Concepts
Keynesian economics
balance of trade
monetary standards
national consumption preferences
Questions to Reflect On
- How can modern economies achieve a healthy trade balance without a metal standard?
- What policies can offset a persistent trade deficit?
A Different Perspective
A rigid metal-backed money supply may limit flexibility, making trade balance less controllable.
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