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Subject:
Re: functional finance
From:
Matias Vernengo <[log in to unmask]>
Reply To:
Societies for the History of Economics <[log in to unmask]>
Date:
Mon, 15 Aug 2011 07:26:02 -0600
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I didn't say that Robert used the term improperly, but I would like to know who said that Abba Lerner and functional finance led to the dysfunctional deficits, if anybody did.  By the way, if Colander's "Keynes" would not be a supporter of deficits, in the middle of this crisis, what would he advocate, expansionary contractions?!

Matías Vernengo
Associate Professor
University of Utah
260 Central Campus Drive, Room 371
Salt Lake City, UT 84112
(801) 349-9462
________________________________________
From: Societies for the History of Economics [[log in to unmask]] On Behalf Of Colander, David C. [[log in to unmask]]
Sent: Monday, August 15, 2011 6:43 AM
To: [log in to unmask]
Subject: Re: [SHOE] functional finance

I think Robert is correct in his use of functional finance. In the General Theory, there is no discussion of deficit finance or using spending or taxes to steer the economy. That came from Lerner ("Was Keynes a Keynesian or a Lernerian?" Journal of Economic Literature, December, 1984). So what is called Keynesian policy is not really the policy of Keynes--it is Lerner's version of it, which is functional finance. My own belief is that Keynes would not be a strong supporter of deficits today. ("How Economists Got It Wrong: A Nuanced Account" (Critical Review, David Colander (2011) 23:1-2, 1-27)

Dave


David Colander
CAJ Distinguished Professor of Economics
Department of Economics
Middlebury College
Middlebury, Vermont, 05753
(802-443-5302)


-----Original Message-----
From: Societies for the History of Economics [mailto:[log in to unmask]] On Behalf Of Matias Vernengo
Sent: Monday, August 15, 2011 8:06 AM
To: [log in to unmask]
Subject: Re: [SHOE] functional finance

Hi Robert:
Who claimed that, and for what period? My understanding is that most people simply ignore the existence of functional finance, so it's hardly blamed for anything.
Best,
Matias

Matías Vernengo
Associate Professor
University of Utah
260 Central Campus Drive, Room 371
Salt Lake City, UT 84112
(801) 349-9462
________________________________________
From: Societies for the History of Economics [[log in to unmask]] On Behalf Of Robert Leeson [[log in to unmask]]
Sent: Sunday, August 14, 2011 7:36 PM
To: [log in to unmask]
Subject: [SHOE] functional finance

Has anyone (or will anyone) defend Abba Lerner against the charge that "functional finance" has led to dysfunctional deficits?

Robert Leeson

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