Friday 23 Feb 2018 | 19:41 | SYDNEY
Friday 23 Feb 2018 | 19:41 | SYDNEY

Reader riposte: The ghost of Keynes



17 July 2009 14:57

John Hannoush comments on The Economist's critique of the economics discipline (in its latest issue), which Sam linked to this morning:

On the 'failure of economics', I couldn't help noticing the oddity that everyone is now saying that macroeconomic theory has been pretty unhelpful (notably Krugman), while governments everywhere are supposedly relying on one of the great macroeconomic theories, Keynesianism, to justify uber-expenditure and debt.

Actually, I think Krugman, DeLong and co. are being consistent. What they have been saying is that much of modern macro has turned out to be pretty useless when it comes to the specific case of the current crisis. By contrast, much of the recent debate over the efficacy of fiscal policy has basically involved rehashing (or forgetting) old arguments – like the Treasury View – that were conducted back around the time of Keynes' General Theory.

You may also be interested in...

  • Popular 5 Jul 2017 10:44
    Tareq Kamleh’s latest video is a jarring demonstration of the jihadi propensity to cite humanitarian activities in a bid to disguise their true motivations and actions.
  • Popular 3 Mar 2017 15:34
    Next week Malcolm Turnbull will attend the first ever IORA Leaders Summit in Jakarta, marking the 20th anniversary of that regional grouping.
  • Popular 31 Mar 2017 12:21
    The skills these individuals pick up in Western countries help to plug gaps created by well-known shortcomings in China’s education system and corporate culture.