For fun, I took a quick look back in my econ notes this evening (have not looked at those in ages, most would have chucked them ages ago)... anyway, apparently I need to eat some crow for a comment I made above...
"printing money is monetary policy, not Keynesian"
Reality is right on the point that printing money is advocated by Keynes, though as usual, his interpretation is a little strong. When I think of "printing money" being very weak monetary policy, I think in terms of (but not limited to) some South American governments of years gone by that *primarily* used this + printed vast amounts of currency to finance huge structural deficits (with obvious disastrous effects). In the Keynesian case, printing money is used to address the increased demand for money associated with the outward shift in the curve (due to the expansionary fiscal policy). Not satisfying that demand crowds out the expansion, and other methods to increase the money supply are somewhat contractionary (thus diminishing the effectiveness of the fiscal policy). Of course, when the cycle swings back all the opposite holds: the central bank should pull in currency to not limit the fiscal drag. The net result is not printing money beyond that demanded by the rate of inflation (which should be kept in check).
I can see why this might be distasteful to someone with a libertarian view, but it does not diminish the importance of the cyclically balanced fiscal policy as the modern consequence of Keynes. At least that is my view.
posted by 69.63.59...
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- Car company bailouts, No Snaab , Thu, 5 May 2011 13:19:51
- GM to add 4,000 jobs, duking it out with Toyota, No Snaab , Wed, 11 May 2011 07:58:09
- Important to see the big picture, Noel , Fri, 6 May 2011 06:16:54
- Doubly Ironic, Reality, Fri, 6 May 2011 07:00:56
- So why don't you tell us, Noel , Fri, 6 May 2011 09:45:54
- He doesn't deal in "reality", No Snaab , Fri, 6 May 2011 11:17:12
- Re: So why don't you tell us, Reality, Fri, 6 May 2011 10:46:21
- You didn't answer the questions, Noel , Fri, 6 May 2011 11:17:54
- Re: You didn't answer the questions, Reality, Fri, 6 May 2011 11:43:04
- Re: You (still) didn't answer the questions, Noel , Fri, 6 May 2011 12:49:13
- He won't answer, No Snaab , Fri, 6 May 2011 14:12:45
- What is Heaven like?, Reality, Fri, 6 May 2011 15:04:00
- less vs more vs balance, James, Fri, 6 May 2011 15:31:40
- Balance is okay, Reality, Fri, 6 May 2011 16:10:30
- What color is the sky in your world?, Noel , Fri, 6 May 2011 16:24:48
- Blue, Black, Grey, White, Orange, Pink, Red,, Reality, Fri, 6 May 2011 16:46:55
- So without the government stepping in, Noel , Fri, 6 May 2011 19:55:24
- Re: Blue, Black, Grey, White, Orange, Pink, Red,, James, Fri, 6 May 2011 18:11:52
- False Choice, Reality, Fri, 6 May 2011 13:33:38
- Re: So why don't you tell us...Been there done that an, Joeychess, Fri, 6 May 2011 10:22:45
- That's fiscally responsible and also well stated yet, Joeychess, Fri, 6 May 2011 08:19:33
- Re: Important to see the big picture...Well said n/m, Joeychess, Fri, 6 May 2011 06:22:03
- Don't kid yourself, BTG88, Thu, 5 May 2011 21:59:15
- Gov't role in today's economy, adl6009, Thu, 5 May 2011 19:17:20
- Ironic timing, "new" GM is caught stuffing channel, Reality, Thu, 5 May 2011 13:41:26
- Macro econ. vs the guy at the plant, AlS , Thu, 5 May 2011 18:16:21
- Keynesianism is Macro Econ, duh!, Reality, Thu, 5 May 2011 18:27:34
- "I address car topics under a different user name.", Steve T., Fri, 6 May 2011 08:02:22
- Keynes vs. Keynes..., James, Fri, 6 May 2011 06:49:05
- Re: Keynesianism is Macro Econ, duh!, kkelley, Thu, 5 May 2011 20:37:44
- Apparently stuffing the distribution channel works, Paul B., Thu, 5 May 2011 16:33:57
- Re: Ironic timing, "new" GM is caught stuffing channel, kkelley, Thu, 5 May 2011 14:50:16
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