Understanding the Keynesian Economics of Tanzan Ishibashi

As a journalist, Tanzan Ishibashi asserted the necessity of expansionary fiscal policy during the great global depression to overcome deflation. Therefore, Ishibashi doubtless correctly understood Keynesian economics to a certain extent. This paper examines the degree to which he understood Keynesian economics, based on his 1935 Toyo Keizai editorial titled, “The Upper Limit of Government Finance Expansion and Lower Limit of Contraction.” The results show he used the equilibrium condition “Savings (S) = Investment (I)” to explain how the scale of government finance is determined, but he did not always mention the principle of effective demand that states when the scale of public finance expands, the equilibrium condition changes. It follows that, at the point prior to The General Theory of Employment, Interest and Money being published in 1936, Ishibashi’s understanding of Keynesian economic was limited