Saturday, December 8, 2012

Lord Keynes — The Essence of Keynesianism is Investment

When investment collapses the question then becomes: how can that private sector investment be restored? Is there a substitute for it in the meantime to increase employment, income and output?
The answer is yes. And consumption is certainly one factor, but not the only one. In fact, the major Keynesian method to restore the health of economies historically has been stimulus programs that take the form of public infrastructure/public investment.
Social Democracy for the 21st Century
The Essence of Keynesianism is Investment
Lord Keynes

7 comments:

The Arthurian said...

The essence of Keynes' General Theory was to get money out of savings and into circulation -- by investment, by consumption, by any means necessary.

y said...

Interesting lecture by Paul Davidson:

http://www.youtube.com/watch?v=31wjPE-mUb4

Tom Hickey said...

As Warren has said, taxes and saving results in fiscal drag. Ergo, decide the size government the people want and tax according to eliminate fiscal drag while maintaining price stability and making space for non-govt saving desire.

Keynes doesn't seem to think that all saving desire is proper, e.g., if it leads to rent-seeking, which is parasitic on circular flow. Ergo "euthanize the rentier."

y said...

Tom,

It might be worth having a link to this text on the front page, next to the other main links. It gives a good introduction to the main post-Keynesian ideas and arguments:

'Introduction to post-Keynesian Economics'

Marc Lavoie

macropolis.wikispacse.com/file/view/Introduction+to+Post-Keynesian+Economics+-+Lavoie.pdf

Tom Hickey said...

@ y

link doesn't work

y said...

http://macropolis.wikispaces.com/file/view/Introduction+to+Post-Keynesian+Economics+-+Lavoie.pdf

Tom Hickey said...

Thanks. Done.