Posted by: Dirk | September 18, 2015

Keynes was a Keynesian

Lopokova_and_Keynes_1920sI have often heard Keynesians and non-Keynesians agree on the “fact” that Keynes never explicitly argued for an increase in government spending. However, in this letter to (US-president) FDR Keynes writes:

In the field of domestic policy, I put in the forefront, for the reasons given above, a large volume of Loan-expenditures under Government auspices.

Keynes was a Keynesian, at least in times of depression. In his letter, which I think is very important, Keynes argues in the context of the monetary circuit and purchasing power. This financial or monetary view of production is the essential Keynesian view, I believe. It is opposed to the neoclassical view which starts from the real side of the economy and never really comes to terms with the role of money in the economy.

[The photo shows Keynes and his wife sometime in the 1920s; source: Wikipedia]


Responses

  1. I agrede

  2. Sorry, I say I agree (damned tablet)


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