This book examines the insights that Keynesian macroeconomics offers into the economic history of the prewar British economy. It adopts a modern economic approach to issues such as unemployment, the price level and exchange rates in the period 1870-1939, making use of the latest advances in time series analysis and macroeconomics. In addition to being of interest to economic historians, it is relevant to economists concerned with current policy issues, since it shows how far correct policy choices depend on particular historical circumstances. This book examines the insights that Keynesian macroeconomics offers into the economy.