Friedman and Hayek on QE II:
Haven't had time to read these posts yet, but I captured the links form my side bar, re: Friedman (Milton, not the ass-hat Tom.)
Delong
Beckworth via Thoma
Beckworth directly
Re: Hayek.
Beckworth
Dead economists favor QE II! Though I think Keynes might have been tempted to write a very politely stated letter of criticism.
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2 comments:
I believe Keynes's politely stated letter of criticism would have been along the lines of, "okay, but what does this do to increase demand and thereby stimulate businesses to hire in order to meet the increased demand? What does it do to improve the current abysmally-low propensity to spend?"
I.e., monetary easing may be what Keynesian economics is most famous for amongst those not fully up on it, but it's the *nature* of the monetary easing that Keynes would have a problem with. Monetary easing that merely further stuffs already-overstuffed mattresses might as well not even be happening, despite Milty-worshipping monetarists' insistence that sooner or later there will be mattress explosions and the money will reappear in the economy fostering economic activity.
- Badtux the Economics Penguin
And as Krugman noted, Freidman and the monetarists were wrong:I’ve always considered monetarism to be, in effect, an attempt to assuage conservative political prejudices without denying macroeconomic realities. What Friedman was saying was, in effect, yes, we need policy to stabilize the economy – but we can make that policy technical and largely mechanical, we can cordon it off from everything else. Just tell the central bank to stabilize M2, and aside from that, let freedom ring!
When monetarism failed – fighting words, but you know,...http://krugman.blogs.nytimes.com/2010/11/26/the-instability-of-moderation/
On a completely different note bumpa: You're right about intellectual honesty.
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