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Comments on: The rebirth of “Keynes”: A good or a bad thing? http://www.tvhe.co.nz/2008/11/28/the-rebirth-of-keynes-good-or-bad/ The Visible Hand in Economics Sun, 30 Nov 2008 20:57:50 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: Matt Nolan http://www.tvhe.co.nz/2008/11/28/the-rebirth-of-keynes-good-or-bad/#comment-3779 Sun, 30 Nov 2008 20:57:50 +0000 http://tvhe.wordpress.com/?p=2167#comment-3779 “Keynesianism has to be internationally focussed if it is really to work.”

That is an interesting point. I agree that it is essential to look at the open economy impact of policies – given that even large economies like the US face a significant tradable sector.

However, the existence of this trading often reduces the ability to have Keynesian (or monetary) stimulus policies – because if everyone does this it cancels out the “exchange rate channel”.

However, you are definitely right when you say that we need further integration between nations policy surround recent events – as it is a global event. However, I’m not sure if the goal of global policy should be “Keynesian stimulus” – I think the first step is to identify what the problem is, and then see how countries can work together to fix it.

]]> By: Arthur James http://www.tvhe.co.nz/2008/11/28/the-rebirth-of-keynes-good-or-bad/#comment-3778 Sat, 29 Nov 2008 06:47:10 +0000 http://tvhe.wordpress.com/?p=2167#comment-3778 My comment on Robert Reich’s blog on the rebirth of Keynes is that we also need a debate about the fact that the revival of the United States economy depends on the revival of the global economy – and vice versa. So the US needs to provide leadership to the rest of the world economy, and this needs to encourage other major countries to act in ways that will be helpful to us. To give leadership in this, we need to stand firm against protectionism ourselves, as well as coordinating our fiscal (tax cuts or spending) and monetary stimuli with other major economies. Markwell’s book on Keynes and international relations leads me to believe that this is precisely what Keynes had in mind in the 1930s (after he got over his short temptation to protectionism) and would again today. Keynesianism has to be internationally focussed if it is really to work.

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