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Date: | Thu Feb 1 09:29:33 2007 |
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Writing as a historian of economic policy I wonder about Pat Gunning's comment here. In particular the following:
1. ' I would speculate that few noted economists today see public spending, by
itself, as a means of avoiding recession;'
How many economists ever believed this, even in the heyday of the Keynesian era?
2.'And, if there was a recession, most would not expect government spending
financed by borrowing to reverse it' .
Maybe not deficit spending alone but that does not make the opposite true, namely that economists
would support the balanced budget as a means of reversing a recession. Indeed in the UK after 1992
borrowing was very high and it could be argued that it was the combination of devaluation and astute
demand management which facilitated the economic recovery.
3.'This leaves monetary policy; and few would advocate expansionary monetary
policy, given what we know about the relationship between money and inflation.'
How many is 'few'? Do they include the economists who advised Alan Greenspan for all those years?
See 'United States: leading the global recovery
Western Europe: moderate growth prospects', UNECE Economic Survey of Europe, 2022 No. 1
Moreover, what exactly do we actually know about the the relationship between money and inflation?
Scott Newton
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