John Maynard Keynes' New economic theory revisited.

Checking in - and wishing I'd been at my great-grandfather's dinner table when Keynes came to see him...they were friends and had some professional interactions (mainly to do with Britain's departure from the Gold Standard, I believe!).

I'll think about this some more.

kitchenpete: How cool is that???!???

Let me make a round-about way of the answer here. Monetary policy to expand a money supply cannot have downward pressure on prices. Monetary policy in the situation of 1930's slump did not work.

Do The Good Times Help?
It is my understanding that Keynes theoretically believed that any deficit spending debt was to be paid off during, " THE Good Times".

My main question, if the above is true, is......

WHEN are Those Good Times?

Will the exist?

AND,......

Just WHERE are Those Good Times?

Will the debt be paid in The elusive 'Good Times'?


Simply wondering....

fatima10

The Good Times can exist but the reduction of spending is rare.

The reduction of spending is rare because politicians have short terms and want to show their efforts. Reducing spending is a long term concern.

Actually one of the main points in Keynesian-NonKeynsian controversies is whether a big government is good nor not.
(I am not necessarily opposing to a big government, though it often causes inefficiency.)

To paraphrase Keynes: Did he not say?????:


"IN THE LONG-RUN, WE ARE ALL DEAD".

So...personally, I believe in the School of VooDoo Economics! Looks like Greespan is a practicioner of the VooDoo Economics, as well...Doesn't he have a Zombie~like quality about his proposals.

{I do have the Zombie~look appearance. Hmmm, maybe *I* should search for a new School of Economics?}

What I know about the anti-cyclic theory of Keynes, is that it works for the short term. The believe is that producers and consumers will get so much confidence that they will also start spending more and that the economy will reach long term equilibrium sooner. Like said in other posts, the debt should be paid off in good times, but due to the short term vision of many politicians, this is often delayed. Beside that, I don't believe debt is a good thing.

For the long term Keynes has no effect. The crowding out will just cause consumer spending to decrease as much as government spending has increased. The long term effect on the economy will be none (except for investments of course, those can have a structural effect).

The growing of international economic relations could make the theory less relevant. Economies are becoming more and more open, especially with free trades zones all around the world (NAFTA, EU, south asia, etc.). Also WTO talks about dropping protectionistic measures like tariffs, quota's and subsidies will contribute to more open economies. This will cause government spending to have less and less effect on the national economy.

I didn't read Keynes' book, but what i got from secondary literature makes me oppose the anti-cyclic theory. First, it has no long term effect, second, often it is not well applied as politicians have short time goals, third, economies around the world are becoming more and more open what results in less effectiveness of the government spending.

Hi guys, new here.
Well I'm still reading through his work.
Prolific so and so isn't he!
First thing I decided was that he can walk the walk…
Did a good job of turning his understanding of money to his own advantage.
Second thing was his interests in other Art related topics..
so seems a good all rounder.
As far as the content of the work…
still trying to get my head around some of the concepts.
New at this…
Still cant believe that a bank can lend out more than it actually has..
now is it just me or is that just downright twisted?

needsandwants

Banks can lend what they hold on behalf of depositors but regulations prevent them from lending more than this.

In fact, deposits held + own capital > loans made is the usual formula which needs to be applied.

The amount of capital which regulators require the banks to hold, not loan, is determined by the type of business they conduct (i.e. the risk profile).

I can provide backup on this if you need...

KP

hi Kitchenpete.

thanks for that.

What you just said, is exactly what I would hope happens within the banking system.

But why do people keep telling me otherwise?

here is a quote

"the process by which banks create money is so simple the mind is repelled.
Where something so important is involved, a deeper mystery seems only decent"
"John Kenneth Galbraith"
Money: whence it came, where it went (1975)

Going off the rails here a bit, was it Keynes' work that is responsible for one of the Chancellors golden rules today of not adding to the UK Public Sector Net Cash Requirement unless the spending project funds investment into captial goods? If I am completely misguided I am sorry! I haven't fully studied the Keynes/classicist etc schools of economics yet, I'm starting the degree course in 3 weeks tho!

Can any of you gurus out there point out the theories by John Maynard Keynes which are still in use today?

Interesting discussion.

Keynes was also an advisor to Lloyd george during the negotions leading up to the Treaty of Versailles, which redrew the map of Europe after WWI. I don't know enough about this very interesting man, but am now inspired to learn more.

<bookmark>

Writing a full-fledged post of my own would take more time than I will have this week and the next, so I will have to substitute with references for now.

For a 1700 word overview of the issues involved, I found one of Paul Krugman's Slate columns from 1997 pretty helpful. (That was way back when Krugman still criticized foolish liberals.) The purpose of the article was to chastize some simplistic popular caricatures of Keynesian thought, not to give a genuine introduction -- but I think you will still get the important ideas.

For a book chapter sized exposition of the pre-Keynes and the post-Keynes macroeconomy, Brad deLong of the UC Berkeley has webbed his Macroeconomics 101 lecture notes. They come as close to a textbook as anything you will find online. Chapters 6 through 9 do a very good job of contrasting the pre-Keynesian flexible-price model to the post-Keynesian sticky-price model.

Good luck exploring!

Thomas,

How kind of you to go to such lengths to find some goddam Krugman piece on Keynes !

I have the DeLong lectures in printing now and will read them with interest. His name is familiar, perhaps I have met him.

Always happy to brighten your day!

I have spent about an hour reviewing the DeLong lecture notes. I guess it is an undergraduate course, and an elementary one at that. I was surprised to find so many undefined terms, inconsistencies, verbal definitions inconsistent with their algebraic expressions, and finally a reluctance to use any mathematical expression more complex than a simple ratio. Not very impressive even taken as an exercise in descriptive statistics. Perhaps it gets better …..