Clark Johnson on “Keynes: Evidence for Monetary Policy Ineffectiveness?”

Over the last couple of days we have published four guest posts by Clark Johnson on “Keynes:  Evidence for Monetary Policy Ineffectiveness?”. Here you can read the paper in its entirety.

Clark, thank you for your contribution to my blog. I am sure my readers have enjoyed it as much as me.

PS here is Keynes celebrating the UK giving up the gold standard in 1931. Unfortunately at the time her wrote General Theory (1936) he had forgot about how powerful monetary policy can be and instead as Clark has so clearly demonstrated advocated the use of fiscal policy. Maybe the problem was that Keynes thought that devaluation of the pund worked through a competitiveness channel rather than through an increase in the money supply and money velocity. See more on that topic here and here.

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  1. I have enjoyed the series by Mr. Johnson. It is thoroughly educational and very useful in my pursuits of historical nature. Thank you!

    History does not repeat itself, but it does rhyme. – Mark Twain

    • I really liked the Lorenzo/Horwitz debate also. I can clearly identify with Lorenzo’s feeling about the lack of social graces on the part of internet austrians – and he got an admission that deflation is bad instead of a moment to be seized upon as a sort of redemptive religious experience.

  2. Peter C

     /  July 2, 2012

    Are you fellows completely nuts? Japan for two decades and the QE in the US and elsewhere are demonstrations that Keynes knew what he was talking about.

    If you are willing to ignore the evidence, then maybe you’re right. Maybe Bernake simply needs to flood the US with more liquidity. What I’d like to see is, if and when, the economy picks up, and more normal conditions prevail and that liquidity actually starts being used, and inflation starts, I’d like to see Bernake get that liquidity back in the box without sending interest rates through the roof and the economy back into a recession.

    Bernake, like Greenspan;and like ‘Milty’ doesn’t have enough sense to be out on his own without a minder.They should send him back to his books where his harm won’t be so direct and immediate.

  3. Keith

     /  September 13, 2012

    Very nice video presentation 🙂

    I would like to share this very interesting post I just read this morning posted Ed Butowsky about monetary policy. He discussed the impact of mentioned policy.


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