Lars P. Syll’s Blog Krugman vs Kelton on the fiscal-monetary tradeoff

The battle of the titans. Or maybe better, David and Goliath.

We have to free ourselves from the loanable funds theory — and scholastic gibbering about ZLB — and start using good old Keynesian fiscal policies. Keynes — as did Lerner, Kaldor, Kalecki, and Robinson — showed that it was possible to promote economic growth with an “appropriate size of the budget deficit.” The stimulus a well-functioning fiscal policy aimed at full employment may have on investment and productivity does not necessarily have to be offset by higher interest rates.

Lars P. Syll’s Blog
Krugman vs Kelton on the fiscal-monetary tradeoff
Lars P. Syll | Professor, Malmo University