Steve Kates wrote:
>
> Prior to the publication of the General Theory economists had been, so far as the macroeconomy was concerned, laissez faire. Since then it has been almost entirely the other way round. Once theory opens the role for public spending as the crucial counterweight to the supposedly natural tendencies of economies to fall into recession, then any suggestion that economic theory represents a laissez faire perspective falls completely away. 


Steve, I guess it is difficult to know what Krugman had in mind. 
However, I would supplement your remarks with some comments about 
various anti-Keynesian sentiment among economists, particularly after 
the 1960s and particularly in the U.S. Insofar as one is referring 
exclusively to the "macroeconomy," are not monetarism and supply-side 
economics largely laissez faire, according to your view?

It may be no exaggeration to say that what remains of Keynesianism in 
the U.S. today is anachronistic. I would speculate that few noted 
economists today see public spending, by itself, as a means of avoiding 
recession; although many support it for other reasons. Most economists 
do not expect a recession so long as there is monetary stability and 
consistency in government spending and taxing policies. And, if there 
was a recession, most would not expect government spending financed by 
borrowing to reverse it. This leaves monetary policy; and few would 
advocate expansionary monetary policy, given what we know about the 
relationship between money and inflation.

I don't want to start a discussion on the merits of Keynes or 
Keynesianism. My only point is that I think that you may have neglected 
attitudes about the macroeconomy that have followed the years of high 
macro theory. But perhaps you discuss these in your book.

Pat Gunning