Changes in expenditure rather than changes in the money stock are causal in economic performance. Changes in money stock do not necessarily result in changes in expenditure. Velocity of money depends on liquidity preference. If the money stock increases while the population increasingly desires to save rather than spend, no change in economic performance will follow. A chief point of the General Theory is that spending as "effective demand" drives an economy. As a consequence fiscal policy is more influential economically than monetary policy in that it concerns spending which can be targeted through specific appropriations.
Here we are with MMT reiterating the point that Keynes was making to FDR in this letter.
Here we are with MMT reiterating the point that Keynes was making to FDR in this letter.
Keynes on the quantity theory and techniques of recovery (letter to FDR)
Dirk Ehnts | Lecturer at Bard College Berlin
Links on Dirk Ehnts’ ‘Keynes on the quantity theory and techniques of recovery’
ReplyDeleteScientifically, Keynes is long dead ― more precisely, since the General Theory. Keynes got Profit Theory wrong. This means that the whole analytical superstructure of the GT is scientifically worthless and that Keynes’ policy proposals had NO sound scientific foundations. After-Keynesians failed to spot Keynes’ foundational blunder to this day. This again proves that economists are scientifically incompetent. For details see:
Forget Keynes
http://axecorg.blogspot.com/2018/02/forget-keynes.html
Macroeconomics ― dead since Keynes
http://axecorg.blogspot.de/2016/12/macroeconomics-dead-since-keynes.html
How Keynes got macro wrong and Allais got it right
https://axecorg.blogspot.de/2016/09/how-keynes-got-macro-wrong-and-allais.html
Keynes’ intellectual nonexistence
https://axecorg.blogspot.de/2017/12/keynes-intellectual-non-event.html
Marshall and the Cambridge school of plain economic gibberish
http://axecorg.blogspot.de/2016/09/marshall-and-cambridge-school-of-plain.html
Post-Keynesianism vs MMT: a Zombie debate
https://axecorg.blogspot.com/2019/04/post-keynesianism-vs-mmt-zombie-debate.html
Keynesians ― terminally stupid or worse?
https://axecorg.blogspot.com/2017/08/keynesians-terminally-stupid-or-worse.html
From Keynes’ fatal blunder to the true economic model
https://axecorg.blogspot.com/2019/04/from-keynes-fatal-blunder-to-true.html
Egmont Kakarot-Handtke