Nicholas August Ludwig Jacob Johansen (1844–1928) was a

German-American German Americans (, ) are Americans who have full or partial German ancestry. According to the United States Census Bureau's figures from 2022, German Americans make up roughly 41 million people in the US, which is approximately 12% of the pop ...

amateur economist, today best known for his influence on and citation by

John Maynard Keynes John Maynard Keynes, 1st Baron Keynes ( ; 5 June 1883 – 21 April 1946), was an English economist and philosopher whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments. Originall ...

. He wrote under two pen names: A. Merwin and J. J. O. Lahn.

Influence

He was largely unrecognized in his lifetime, but following the

Keynesian Revolution The Keynesian Revolution was a fundamental reworking of economic theory concerning the factors determining employment levels in the overall economy. The revolution was set against the then orthodox economic framework, namely neoclassical econom ...

, he was recognized as one of the most significant influences on '' The General Theory,'' and he is cited in Keynes's 1930 ''Treatise on Money'' (p. 90). He is credited with devising an early form of

effective demand Effectiveness or effectivity is the capability of producing a desired result or the ability to produce desired output. When something is deemed effective, it means it has an intended or expected outcome, or produces a deep, vivid impression. Et ...

, independent discovery of the multiplier, and less recognized contribution to monetary economics and business cycle theory; . His 1903 ''Der Kreislauf des Geldes und Mechanismus des Sozial-Lebens'' (''The Circuit Theory of Money,'' written in German) can be seen as an early work in

monetary circuit theory Monetary circuit theory is a heterodox theory of monetary economics, particularly money creation, often associated with the post-Keynesian school. It holds that money is created endogenously by the banking sector, rather than exogenously by cen ...

. Crucially, he distinguished the roles of ''savings'' and ''investment'' – since only investment is directly productive, savings may be harmful to the economy, and may "tend to impoverish others" – a form of the paradox of thrift. In his last years (1928), he warned of an upcoming long period of stagnation, which may be seen as prophesying the

Great Depression The Great Depression was a severe global economic downturn from 1929 to 1939. The period was characterized by high rates of unemployment and poverty, drastic reductions in industrial production and international trade, and widespread bank and ...

References

* * {{DEFAULTSORT:Johannsen, Nicholas German emigrants to the United States 1844 births 1928 deaths American economists German economists