Subject: | |
From: | |
Date: | Fri Mar 31 17:18:55 2006 |
Content-Type: | text/plain |
Parts/Attachments: |
|
|
===================== HES POSTING ==================
Kevin Quinn's reference to Keynes's "willingness to bootstrap" theory in
conjunction with Robertson's dismissal of liquidity preference theory
brought to mind an exchange between Keynes and Joan Robinson. Keynes
begged Robinson not to include a chapter on the relationship between
British and foreign interest rates in her _Essays in the Theory of
Employment_ because
You do not seem to realize that if you are right the whole theory
of liquidity preference has to be thrown overboard. The rate of interest
on English money no longer depends on the quantity of English money and the
liquidity preference of the holders of it. (_Collected Writings_, Vol 14,
p. 146)
Walter Eltis cites this example in a discussion of why Keynes had so little
influence on British unemployment policy in the 1930s (_Unemployment and
the Economists_, Bernard Corry, ed). Academic bootstrapping that ignores
reality is hardly superior to formal models that do the same. Was Keynes
really so dedicated to reality as to his model? (I can't answer that, but
Quinn's ruminations prompt me to ask.)
--Neil Skaggs
============ FOOTER TO HES POSTING ============
For information, send the message "info HES" to [log in to unmask]
|
|
|