The General Theory of Employment, Interest and Money

Keynes believed he was writing a book on economic theory that would largely revolutionize the way the world thinks about its economic problems.^[1] Keynes said in his own mind he was quite sure of this.^[1] The book introduces the key notion of expectations in Chapter 5.^[2] Short-term expectations concern the price a manufacturer can expect for finished output when starting production.^[2]

Long-term expectation concerns what the entrepreneur can hope to earn in future returns from adding to capital equipment.^[2] Keynes noted it is sensible for producers to base expectations on the assumption that most recently realized results will continue.^[3] However, long-term expectations are liable to sudden revision.^[3] At the present stage, he stated that he could not anticipate anyone else believing this.^[1]

Realized results cannot even approximately replace or eliminate the factor of long-term expectations.^[3]