David Levine has a real prissy post service on the Keynesian Illusion.
Some large themes: Standard Keynesian economic science violates budget constraints. He explains it well, but it is certain to occasion the green venom from amongst the "Say's police push clit fallacy" brigade that has a lot of problem agreement the divergence betwixt budget constraints together with equilibrium conditions.
David does a lot without equations. That broadens the appeal, but equations tin endure useful. For event equations clarify that crucial divergence betwixt budget constraints together with equilibrium conditions. Equations tin seat to residual dizzy controversies. We mightiness non however endure writing papers, books, together with spider web log posts virtually what "Keynes actually meant," fourscore years afterward the fact, or using "Say's law" equally rotten tomatoes, if Keynes had written only about equations. Cynically, peradventure the lesson is that lack of equations -- or fifty-fifty an equations appendix or citation -- keeps debate going together with your refer inwards the papers.
I too fearfulness that his lovely anecdote virtually people each of whom wants what others create volition Pb readers a flake astray. Keynesian economic science is virtually lack of "demand," gummy prices non absent prices. It's non virtually absence of money, double coincidence of wants, together with and thus forth.
David goes beyond the green IS/LM formalism, to explicate only about of the "coordination failure" interpretations of Keynes. He too references Axel Leijonhufvud's "great together with famous work" describing a mismatch betwixt saving, a wishing for generic hereafter consumption, together with the need for specific goods that firms ask to invest.
He has a prissy personal floor of his Keynesian upbringing, which reminds me of my own. And
The concluding paragraph is a gem:
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| David Levine's analogy for Stimulus |
David does a lot without equations. That broadens the appeal, but equations tin endure useful. For event equations clarify that crucial divergence betwixt budget constraints together with equilibrium conditions. Equations tin seat to residual dizzy controversies. We mightiness non however endure writing papers, books, together with spider web log posts virtually what "Keynes actually meant," fourscore years afterward the fact, or using "Say's law" equally rotten tomatoes, if Keynes had written only about equations. Cynically, peradventure the lesson is that lack of equations -- or fifty-fifty an equations appendix or citation -- keeps debate going together with your refer inwards the papers.
I too fearfulness that his lovely anecdote virtually people each of whom wants what others create volition Pb readers a flake astray. Keynesian economic science is virtually lack of "demand," gummy prices non absent prices. It's non virtually absence of money, double coincidence of wants, together with and thus forth.
David goes beyond the green IS/LM formalism, to explicate only about of the "coordination failure" interpretations of Keynes. He too references Axel Leijonhufvud's "great together with famous work" describing a mismatch betwixt saving, a wishing for generic hereafter consumption, together with the need for specific goods that firms ask to invest.
He has a prissy personal floor of his Keynesian upbringing, which reminds me of my own. And
Knowledge of Keynesianism together with Keynesian models is fifty-fifty deeper for the nifty Nobel Prize winners who pioneered modern macroeconomics - a macroeconomics amongst people who purchase together with sell things, who relieve together with invest - Robert Lucas, Edward Prescott, together with Thomas Sargent amid others. They too grew upward amongst Keynesian theory equally orthodoxy - to a greater extent than together with thus than I. And nosotros rejected Keynesianism because it doesn't function non because of only about aesthetic sense that the theory is insufficiently elegant.The constant refrain that critics "don't know" Keynesian economic science is an ingorant (I hateful that non an insult, but inwards its literal meaning, ignoring the facts) calumny. Sargent's outset mass "Macroeconomic Theory" is a nifty event of a modern economists wrestling difficult amongst Keynes.
The concluding paragraph is a gem:
Keynes ain function consists of amusing anecdotes together with misleading stories. Keynesianism equally argued yesteryear people such equally Paul Krugman together with Brad DeLong is a theory without people either rational or irrational, a theory of graphs pulled largely out of sparse air, a serial of predictions that are hopelessly incorrect - together amongst the vain promise that they tin endure seat correct if exclusively the curves inwards the graphs tin endure twisted inwards the correct direction. As it happens nosotros pick out developed much amend theories - theories that gain explicate many facts, theories that furnish sensible policy guidance, theories that function reasonably well, theories that are non an illusion. The electrical flow versions of these theories are real different caricature theories of hopelessly rational people who are all identical. Current theories are non perfect - but different the Keynesian theory of perpetual motility machines they explicate a nifty bargain together with pick out a nifty bargain of truth to them. Influenza A virus subtype H5N1 working macroeconomist reading Krugman together with DeLong feels equally a physician would if the Surgeon General got upward together with said that the agency to cure cancer was to draw blood using leeches.
