Posted by: Dirk | February 17, 2010

Martin Wolf vs Niall Ferguson

After reading this excellent article by Martin Wolf, I propose three new classes to put economists into. They are based on the distinction between those that understand that savings are not automatically equal to investment at all times and that government should react to this if things fall apart (formerly, these people were called Keynesians) and those that understand the problem but don’t want to intervene (formerly Austrians). Then there are those that don’t seem to understand the financial side of the economy and mess things up. These include fiscal conservatives, followers of Ayn Rand that demand absolutely free markets and talk show hosts that maximize their own welfare.

I shall call these groups “Wicksellians” (because Wicksell understood that savings more often than not do not exactly mirror investment and that these imbalances drive adjustment processes), “Austrians” and “Ricardian” (after the simple ideas of Ricardian farms as described by Axel Leijonhufvud). So, here are Martin Wolf and Niall Ferguson in my new classification:

Martin Wolf – Wicksellian

Niall Ferguson – Ricardian

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