----------------- HES POSTING ----------------- Moss Comments on Steven Kates: In his recent post (HES Digest 992) Professor Steve Kates commented about an issue that is larger than "monetarism" and that is "the role of central banks in managing economies and the instability they have been creating in their anti-inflation crusades." I think this an important topic, maybe from an historical period the real question for future historians of economics. Surely this is not the question that Professor Brad Bateman originally asked. I was hoping Brad could comment on Steve's suggestion here and why Brad does not consider this to be the real question for analysis. Finally, if I my add a wrinkle here. Some of the early Keynesians ("those who carried the cross") somehow came to the peculiar conclusion that in a liquidity crisis even Central Banks could not "push on a string" and favored fiscal policy over monetary policy. Was this loss of faith in Central Banking just a passing fad or is it in some way essential to the early Keynesian policy agenda? Friedman and Schwartz were awarded a Nobel Prize for reestablishing (at least to my satistisfaction) the important connection between Central Bank policy and economic stability. Perhaps this is monetarism's finest hour? L. Moss ------------ FOOTER TO HES POSTING ------------ For information, send the message "info HES" to [log in to unmask]