Timmy elsewhere

At the ASI.

An interesting quote from Keynes pointing out that it\’s not all about aggregate demand.

6 thoughts on “Timmy elsewhere”

  1. It’s worth remembering that Keynes’s inconsistency was so notorious that he was lampooned in the press as “the India rubber man”.

  2. Aside from the economic pessimism, which is true, a lot of people really have run out of credit and thus ability to create demand. And a lot of that economic pessimism comes from the fact that many people who lose their jobs (yes I know we don’t have millions of unemployed agricultural labourers or buggy whip makers running around and this all feeds through to benefits for the consumer) know that the next one will not pay as well as the last one did, and are cutting their cloth accordingly.

    Se we have both short-term and long-term problems to solve. Simultaneously.

  3. JustAnotherTaxpayer

    “For that entrenches the old way of doing things”

    If “stimulus” means fiscal deficit spending, sure. But the Sumner view is the opposite, surely? Stabilising expectations of future AD growth with NGDP level targeting works to spur current *investment* spending.

    Empirically: how much investment spending is happening now, how much in the dotcom boom?

  4. “Investment = buying new capital goods.”


    A one eyed Scotsman once told me it was paying last years NHS wage bill.

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