Free markets don't always selfcorrect from "summary" of The General Theory of Employment, Interest, and Money by John Maynard Keynes
In free markets, the assumption is often made that they will naturally self-correct in the face of economic disturbances. This notion is based on the belief that prices and wages will adjust accordingly to restore equilibrium. However, this assumption does not always hold true in reality. When there is a significant decrease in aggregate demand, for example, prices and wages may not adjust quickly enough to restore full employment. This can lead to a situation where resources are underutilized and unemployment remains high. In such cases, the market mechanism alone may not be sufficient to bring about a quick and efficient recovery. Furthermore, the presence of rigidities...
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