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

German-American German Americans (german: Deutschamerikaner, ) are Americans who have full or partial German ancestry. With an estimated size of approximately 43 million in 2019, German Americans are the largest of the self-reported ancestry groups by the Unite ...

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 whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments. Originally trained in ...

. 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, 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 In economics, effective demand (ED) in a market is the demand for a product or service which occurs when purchasers are constrained in a different market. It contrasts with notional demand, which is the demand that occurs when purchasers are not ...

, 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 cent ...

. 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 (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The economic contagio ...

References

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