Sunday, December 28, 2008

A Keynesian Moment

There is some talk that this is a "Keynesian moment" - meaning that it is a time where Keynesian theory should be implemented.  I think it is such a moment, but in a different sense - when the status quo theory and a generation of economists are discredited.  As pre-Keynesian economics was considered to be invalidated by the Great Depression, so current economics, the kind that praises unlimited free trade, free markets, and globalisation, will be rejected.

Economists aren't making things any better for themselves.   Brad Delong proposes to "drive a recovery" by giving everyone 500 000 dollars to buy a house.  A truly silly idea, no?  You would think he would get whacked from all sides. But no - we have another economist Paul Krugman linking to the post and applauding it.

Why oh why can't we have better economists?

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