Setting those problems aside, I have my own disagreements with the ONKM perspective on this question. But this post is not about my own views.
This post is about Lars Syll's views. I would like to ask Lars if he agrees or disagrees with the ONKM view, as I have presented it/translated it above. Because a lot of stuff really does get lost in translation sometimes.
[My guess is that both Paul Krugman and Greg Mankiw would roughly agree with the above, but I could be wrong.]
Worthwhile Canadian Initiative
The orthodox New Keynesian position on liquidity preference and loanable funds
Nick Rowe | Associate Professor of Economics, Carleton Univerity
The orthodox New Keynesian position on liquidity preference and loanable funds
Nick Rowe | Associate Professor of Economics, Carleton Univerity
5 comments:
LOL, this people keep beating the dead horse just because they will never say, out of sheer arrogance and ego, "we were wrong".
The zombie of mainstream economics won't die a sudden death, it will sink itself slowly and silently while the old timer disappear from academics and retire.
'One funeral at a time'
Thanks Mike!
Not really jumping into the fray. Just trying to translate NK models into PK language to try to improve the quality of the debate, because so much gets lost in translation.
Ignacio and Neil: maybe you should actually read my post. You might surprise yourselves!
Damn! I mean "Thanks Tom!"
Translating an irrelevant question from Double Dutch into English doesn't really help matters.
Monetary policy theory doesn't do what it says on the tin. It's just wrong - so why persist with silly theoretical abstractions that don't relate to how banks actually work.
Loans take a long time to come about, but alter expectations in the meantime - certainly after decision in principle. Savings are instant and the default.
It's all angels on a pinhead stuff arguing about who interpreted some long dead economist properly - assuming he got it right in the first place and that can be translated to the different world we have today.
In the meantime we have an entire profession that still thinks its best to push debt onto ordinary people - even when that has clear caused a collapse.
It's time to declare monetary policy harmful and park it.
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