Tag Archives: fiscal policy

Marc Lavoie On The New Fiscalism

Writing for the Broadbent Institute’s blog, Marc Lavoie argues that now that Conservatives are out of power in Canada, the Federal Balanced Budget Act passed in June 2015 should be repealed. According to the Act, pay of the Prime Minister and Ministers and Deputy Ministers have to be reduced by 5% if the federal government is in deficit outside a recession and frozen if the economy is in recession.

Marc Lavoie says:

The Federal Balanced Budget Act that was included in the omnibus Bill C-59, and which passed third reading in June 2015, does not seem to have attracted much engagement either. The Act does not force the federal government to adopt a balanced budget – it has some of the flexibility advocated by the PBO. But it includes measures that discourage the federal government from taking expansionary fiscal measures pre-emptively before a recession is declared. Furthermore, it will induce the federal government to attempt to minimize budget deficits during recessions and to quickly achieve a balanced budget or budget surpluses.

The article also coins the phrase new fiscalism (term originally by Mario Seccareccia):

counter-cyclical fiscal policy should only be used when things are really bad, in particular when monetary policy seems to be running out of ammunition; otherwise, governments should achieve balanced budgets or surpluses.

Marc Lavoie instead argues that the Canadian federal government should use the large borrowing powers to aim to achieve full employment.

The full article Wage Suppression And The Federal Balanced Budget Act is here.

Rules about fiscal policy always have some dubiousness about them. This can easily be seen in stock-flow consistent (SFC) models. Let government expenditure be denoted by G, the tax rate by θ, and households’ propensities to consume out of income and wealth by α1 and α2, respectively. Imagine two almost similar economies

Economy 1: High propensities to consume – i.e., high values for α1 and α2.

Economy 2: Low propensities to consume – i.e., low values for α1 and α2.

Also assume the government expenditure G, and the tax rate θ are the same for both the economies. The budget deficit depends (among other things such as firms’ behavior) on G, θ, α1 and α2. Economy 1 will have a lower budget deficit and higher output and employment than Economy 2. So in order for Economy 2 to have the same level of output and employment as Economy 1, the government of Economy 2 should have a more expansionary fiscal policy than Economy 2. What the fiscal rules do is to endogenize fiscal policy (the government G and the average tax rate θ) with respect to the budget deficit.  This is further deflationary for Economy 2. This implies that fiscal rules have no legitimacy. Even within an economy, (such as either Economy 1 or Economy 2), propensities to consume are changing with time.

Fiscal policy rules sometimes are slightly less strict and accept balancing current expenditures with taxes. Even this is dubious – expenditure on paying school teachers isn’t less important in any sense than building a school. Even more importantly, the budget deficit depends on the current account balance of payments and a nation with a higher current account deficit than a similar economy with no external trade will have a lower output and higher budget deficit for the same fiscal policy.

Budget rules are hence deflationary to output and are anti-full-employment.

I hope the new Canadian government follows Marc Lavoie’s advice.

Free Trade And Tight Fiscal Policy

Harvard economist Dani Rodrik recently responded to a question/critique on why he doesn’t believe in the faith about free trade between nations while not showing that much dissent for trade within boundaries. Among the various points in his defence are fiscal transfers and regional policies. Rodrik says:

Another thing that happens is that there is an overarching state that will engage in transfer payments and other policies that aid the lagging region. The region will have political representatives in the national government who will push for the interests of those adversely affected.

That’s a nice point. See my blog post on how fiscal transfers help in reducing regional balance-of-payments problems.

Cafe Hayek responded to Rodrik here. An important point in that argument is: why does it matter if the consumer buys from a domestic producer as opposed to a foreign producer. The Cafe Hayek author Don Boudreaux says:

Now to point (1) – the more narrowly economic point.  Sellers in foreign countries sell things to buyers in the home country only because they – the foreign sellers – wish to increase their wealth.  The motives are identical to those of sellers in the domestic economy.  What do foreign sellers do with the revenues they earn from the sale of their exports?  They spend them.  They save them.  They invest them.  Perhaps on occasion they hoard them.  These options are no different from the options confronting domestic sellers.  If the funds spent on imports return to the domestic economy as demand for exports, jobs and economic activity shift from import-competing domestic industries into exporting industries.  No problem.  If these funds instead return as investments in the domestic economy, again there’s no problem: when, for example, Ikea opens a store in New Jersey it employs workers in that store no less than would an American who opened a similar store.

Now to argue straight with the above. FDI flow is just one flow in the capital and financial account of the balance of payments. And in the stock sense, FDI is just one type of liability among many others such as government debt held by foreigners. These just pay interest to foreigners.

Apart from that, foreigners are not likely to import as much as they export. A nation can have a high amount of imports and less exports. So there’s an asymmetry here – differing level of competitiveness.

But even if competitiveness were equal, nationality of buyers and sellers still matters. This is because creditor nations’ governments may not expand fiscal policy to the extent that is needed for the benefit of the world as a whole. If the government of a nation keeps fiscal policy relatively tight, it affects domestic demand, output and incomes of economic units and hence their imports.

So to summarize, difference in competitiveness and a relatively tighter fiscal stance of creditor nations affects trade and balance-of-payments of other nations. This in turn affects output because a nation which could potentially grow fast may find itself with balance-of-payments problems. Free trade doesn’t help poor nations.

This discussion can also be used in the case of the Euro Area where trade was made more free when the Euro Area was formed. Since there is no central government for the Euro Area, free trade works against nations which have been affected by the crisis.

Casual Monetarism

In an Op-Ed for The New York Times, Japan’s Economy, Crippled by Caution, Paul Krugman is seen using a highly Monetarist language:

As I said, you might think that ending deflation is easy. Can’t you just print money? But the question is what do you do with the newly printed money (or, more usually, the bank reserves you’ve just conjured into existence, but let’s call that money-printing for convenience). And that’s where respectability becomes such a problem.

When central banks like the Federal Reserve or the Bank of Japan print money, they generally use it to buy government debt. In normal times this starts a chain reaction in the financial system: The sellers of that government debt don’t want to sit on idle cash, so they lend it out, stimulating spending and boosting the real economy. And as the economy heats up, wages and prices should eventually start to rise, solving the problem of deflation.

… When you print money, don’t use it to buy assets; use it to buy stuff. That is, run budget deficits paid for with the printing press.

Now, there are several things wrong about this. The most important one is the implicit assumption in the “model” that fiscal expansion via increased government expenditure is about neutral and that domestic demand is boosted only because of the way in which the government debt is financed – i.e., central bank purchases of government debt. In other words, Krugman is saying that if there is deflation and if there is an expansion of fiscal policy via a rise in say government expenditures, it will have little effect when the central bank doesn’t purchase government debt. Put it in another way, it is saying that the government expenditure multiplier effect acts mainly because of central bank purchase of government debt and not because of the increase in government expenditure per se.

This is silly intuition and the cause of this is the notion that fiscal policy is more or less neutral except in special circumstances.

In reality, it is the other way round. If the government expenditure rises, and if the central bank purchases government debt, the rise in output is mainly attributable to the former. This can of course be seen in a stock-flow consistent model but can also be seen by simple accounting and flow of funds. A rise in government expenditure on goods and services raises output directly and also via the multiplier effect. The central bank has a huge control over interest rates and the additional debt is simply absorbed by the bond markets easily. There’s no competition with other borrowers as the wealth of the private sector rises. In addition, if the central bank purchases government debt, it is hardly clear if households know if inflation is going to rise and increase their consumption because of “inflation expectations”. Even if they think that if inflation is set to rise, they might reduce consumption as inflation might reduce their real wealth.

Which is not to say that asset purchase programs of the central bank or “quantitative easing” has no effect on demand and output. It works via capital gains in wealth leading to higher consumption and the feedback effects of this. It also works if economic units shift their portfolios to buying non-financial assets. The effect of all this is unclear. In addition, as mentioned earlier, casual Monetarism like the language used by Paul Krugman mixes up correct attributions of government expenditure and central bank government debt purchases on output, misleading everyone.

Simply say “raise government expenditures”. Why all this casual Monetarism with “printing presses”?

Do Keynesians Ought To Love Tax Cuts?

Cullen Roche – in response to Paul Krugman – says Keynesians should learn to love tax cuts. His argument is that since Keynesians believe in the principle of effective demand and that since tax rate cuts boosts domestic demand and hence output, it is surprising to find Paul Krugman not favouring tax cuts.

Tax cuts raise output by increasing disposable incomes of economic units who will raise their expenditures in response. This via a multiplier effect will raise output. But it’s not as if tax rate cuts is the only tool available to the government.

Let’s see 4 different ways the government can boost domestic demand:

  1. Raise government expenditures,
  2. Decrease tax rates,
  3. Raise government expenditures and decrease tax rates, and,
  4. Increase government expenditures and raise tax rates.

The expansionary nature of the first three ways above is obvious. For the fourth, it depends on the numbers. So if the government raises tax rates from say 25% to 30% and increases government expenditure by 1%, it is likely contractionary. Instead, if the government increases its expenditure by 25%, it is expansionary.

These are not the only ways available for demand management. The government by coordinating with  the central bank can reduce interest rates. It can make lending/borrowing easier by other ways. It can give guarantees to bonds issued by corporations, thus giving an incentive for corporations to increase expenditures. It can raise tariffs on imports. There are several ways but here those things are less relevant for now.

Each of the four ways above has a different effect on output and the distribution of income. Tax cuts usually favour economic units who earn more. Richer economic units such as rich households have a lower propensity to consume and hence this will have a smaller multiplier effect. If Keynesians favour tax cuts, they’d favour it for low earning households than for corporations.

Of course, the multiplier effect is not a complete argument in itself as the opponents might argue “So cut taxes even more according to your logic”. But at any rate, let’s see how it works.

In stock-flow-consistent models, there’s the concept of a fiscal stance toward which GDP converges for a given government expenditure and a tax rate θ. So we have

GDP = G/θ

With that,

dGDP/GDP = dG/G − dθ/θ

So a percentage rise in government expenditure will have the same multiplier effect as a percentage fall in tax rate.

This of course is the long-run output. For the short run, the expression in the simplest Keynesian model:

GDPG/(1 − α1·(1 − θ))

α< 1

The parameter αis the propensity to consume.

In this case, i.e., for the short run,

dGDP/GDP = dG/G − [α1·θ/(1 − α1·(1 − θ))2dθ/θ

By taking some values such as 0.6 for αand 25% for θ, you can convince yourself that a proportional rise in government expenditure is more effective than a proportional fall in tax rates. Of course, this is not a complete argument but illustrative. If a tax rate cut of x% doesn’t achieve a $1 rise in government expenditure, one can make the case for a higher tax rate cut to achieve a similar result.

Apart from that there are other implicit assumptions of the model: there is no income inequality in the simplest Keynesian models. So rich economic units will have a lower propensity to spend: households working as employees of firms with higher compensation will have lower propensity to consume. Households may have an even lesser propensity to consume out of other incomes such as interest and dividends.

So the multiplier analysis illustrates that a tax cut for richer economic units is not the same as the poorer units because the multiplier in the short run depends on the propensities to spend.

The correct stand hence is about the distributional effects of fiscal policy and the effect on output. So the correct stand is to argue for a rise in government expenditure and fair rates of taxes for economic units. Many economic units will have to pay higher taxes in this view. What’s fair of course is debatable but at least in this line of argument, souls believing in the principle of effective demand needn’t love “tax cuts”.

There is another argument for not promoting lower tax rates. This is because once tax rates are reduced, it is politically difficult to raise it if needed.

Last edited on 11 Sep 2015, 1:47pm UTC (typos corrected, minor edits). 

Thomas Herndon!

So Comedy Central had a nice show on the Reinhart-Rogoff episode and how their work was used to drive world-wide austerity. The show featured Thomas Herndon – the graduate student from the University of Massachusetts Amherst who found errors in R&R’s work.

Great work Thomas!

Worth a watch:

(Click the two pictures to watch the videos from the original website)

The Colbert Report - 1

This is the video where Thomas Herndon appears:

The Colbert Report - 2

h/t Louis-Philippe Rochon and Mike Norman

… One Funeral At A Time?

Eine neue wissenschaftliche Wahrheit pflegt sich nicht in der Weise durchzusetzen, daß ihre Gegner überzeugt werden und sich als belehrt erklären, sondern vielmehr dadurch, daß ihre Gegner allmählich aussterben und daß die heranwachsende Generation von vornherein mit der Wahrheit vertraut gemacht ist.

Translation: A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die, and a new generation grows up that is familiar with it.

– Max Planck.

The variant of this is “Science advances one funeral at a time.”

Margaret Thatcher passed away today but Thatcherism still survives and dominates policy debates. So perhaps Max Planck doesn’t seem to apply to economics yet in a straightforward way.

The best opposition to Thatcherism came from Cambridge. In a small book based on speeches in the House of Lords (1979-1982) The Economic Consequences Of Mrs Thatcher and devoted entirely to pin-pointing the fundamental errors of Thatcherism, Nicholas Kaldor wrote in this in a chapter titled The Economics of the Primitive (18.3.81), page 83:

The belief that public expenditure must be cut in order to balance the budget, which is clearly held passionately by Mrs Thatcher and her immediate associates, derives from an anthropomorphic conception of economics. Primitive religions are anthropomorphic. They believe in gods which resemble human beings in physical shape and character. Mrs Thatcher’s economics is anthropomorphic, in that she believes in applying to the national economy the same principles and rules of conduct as have been found appropriate to a single individual or a family – paying your way, trimming your expenditure to fit your earnings, avoiding living beyond your means and avoiding getting into debt. These are well-worn principles of prudent conduct for an individual  but when applied to policy prescriptions to a national economy they lead to absurdities.

If an individual cuts his expenditure he will not thereby reduce his income. However, if  a Government cut their public expenditure programme in relation to tax rates and charges, they will reduce the total spending in the economy and hence the total production and income. It will reduce the revenue yielded by existing taxes and it will cause public expenditure on unemployment benefits and on the support of firms in trouble, and other similar items, to rise. It is a policy that is appropriate only in times of excess demand and over-full employment, as was the case with Crippsian austerity after the war. At a time like now, with 2½ million unemployed, far from being a recipe for prudent housekeeping and future prosperity it is a recipe for ruin. To keep tightening the budget in the hope of  ‘balancing the books’ is to keep reducing the output and income of the nation and hence to fail to balance the books as tax yields shrink and expenditures to support the disintegrating economy increase.

The word “prudent” still survives to this day and perhaps heard more often, in politicians’ and central bankers’ speeches, research reports of financial markets’ “experts” and in the media and in rating agencies pressuring government to tighten fiscal policy.

Update: Here is John Boehner repeating Thatcherism on Twitter:

r < g Or DEF < g ?

It is frequently asserted by some economists and even some Post-Keynesians that as long as the effective interest rate paid on stocks of debt is less than the growth rate, stock-flow-norms do not keep rising forever. That is, ratios such as public debt/gdp, external debt/gdp do not rise forever at full employment if this condition is maintained, implying thereby that fiscal policy can be used to achieve a higher output and there is nothing one needs to do about the external sector.

It is the purpose of this post to clear such misconceptions.

Fiscal Policy

What can fiscal policy achieve and what are its limitations? In an essay from the centenary conference of 1983, Wynne Godley wrote [1]:

How did Keynes think the economy worked? Any time between 1950 and 1970 1 would have confidently attributed to Keynes, as preeminently important, the following views about economic policy:

(a)    Real demand, output and employment are determined via a multiplier process by the fiscal and   monetary operations or the government and by foreign trade performance.

(b)    Inflation, though influenced by the pressure of demand, is largely indeterminate in terms or economic variables and therefore, if it is to be controlled, requires some kind of direct political intervention.

(c)    Fiscal and monetary policies in any one country are potentially subject to important external constraints.

While there is reasonable support for these views about economic policy in Keynes’s writings, there is no warrant for them at all in the General Theory. Indeed it is strange, seeing how commonly the view is attributed to Keynes that fiscal policy is crucial to real output determination, that the General Theory is concerned with an economy in which neither a government nor for that matter a foreign sector exist at all.

Notwithstanding this I still think, not only that the propositions can be correctly attributed to Keynes, but that they are, themselves, essentially correct. I have however been forced to the conclusion that Keynes was a long way from achieving a coherent theoretical basis for maintaining them, and largely for this reason, his ideas have proved very vulnerable to the attacks from many different directions to which they have been subjected, particularly in the last fifteen years.

To points (a), (b) & (c) above, let me add

(a(i))  Higher output is also possible when the private sector expenditure is higher than private sector income.

This was highlighted by Godley himself in the late 90s, when the US economy expanded in spite of a tight fiscal stance and he was the first to write that this process is unsustainable!

Debt Convergence Analysis

Let us now turn to the question on convergence/divergence of stock-flow norms. In what follows, I simply use debt to denote the public debt or the external debt. Assuming away complications arising from revaluations, we have the identities [2]

Uppercase is for stock of debts, and lower case for debt-to-gdp ratio and g is the growth rate. Note: DEF is primary deficit and excludes interest payments. We will turn to complications added by interest payments soon. Whenever

the stock of debt keeps rising.

Note, when the debt-to-gdp ratio is less than 1 (100%), the sustainability condition is strong on the deficit. The condition DEF < g is at at a debt-to-gdp ratio is 1. Beyond 100%, the condition on the deficit is a bit weaker than DEF < g because the deficit can be between g and g·d.

This argument is sometimes presented differently by some Post Keynesians by including the effective interest rate r. The equation looks like the following when it is included: It is argued that the third term on the right hand side can be set to be greater than the second term (which is to say that r < g is sufficient to ensure sustainability).

This argument (r < g guaranteeing problems are solved) has no substance. This is because rearranging the terms in the way done above, shows more clearly that the stock-flow ratio rises faster than the case where the analysis was done without the interest rate term!

There is one more complication. It may be argued that growth can only bring down the deficit (the deficit here being the public sector deficit). This is true for the case of a closed economy. The convergence of the public debt-to-gdp ratio is also achieved in the case of a closed economy because interest payments by the government is income for the private sector and they will consume it (although the capitalist class’s propensity to consume is less than that of the worker class). Higher consumption leads to higher national income and hence higher taxes, bringing down the deficit.

Wynne Godley and Marc Lavoie [3] showed how this happens precisely in the case of a closed economy:

This paper deploys a simple stock-flow consistent (SFC) model in order to examine various contentions regarding fiscal and monetary policy. It follows from the model that if the fiscal stance is not set in the appropriate fashion—that is, at a well-defined level and growth rate—then full employment and low inflation will not be achieved in a sustainable way. We also show that fiscal policy on its own could achieve both full employment and a target rate of inflation. Finally, we arrive at two unconventional conclusions: (1) that an economy (described within an SFC framework) with a real rate of interest net of taxes that exceeds the real growth rate will not generate explosive interest flows, even when the government is not targeting primary surpluses, and (2) that it cannot be assumed that a debtor country requires a trade surplus if interest payments on debt are not to explode.

Also, they create some very special scenarios, where the external debt stays sustainable.

However, making the above work is difficult for the case of an open economy in general. This was what the essential argument of the New Cambridge School. 

So is there a way to achieve convergence of the stock-flow norm? To achieve that, the external sector deficit (more precisely, the primary balance in the current balance of payments) should be less than the growth rate times the external debt. This creates tensions for demand-management because if the external deficit grows higher than the growth rate, it is usually brought back to a sustainable path by deflating demand.  This is because the balance of payments deficit itself will grow if growth is high! (unless exports improve).

There are of course some scenarios which can lead to the convergence of the external debt (if the markets allow it). A more careful treatment will always lead one to studying income and price elasticities of imports, growth in the rest of the world etc.

Other scenarios which could lead to the improvement of the external sector are:  promotion of exports leading to more success abroad and luck – market forces miraculously achieving the required depreciation to improve the external sector. Since the latter is mere wishful thinking, we see nations trying to depreciate their currencies because it makes their exports more competitive.

To bring the balance of payments deficit back into balance, there is also the option of restricting imports but in the world of “free trade”, it can create tensions between nations.

There are two more options. The first is to ask your trading partners to appreciate their currencies if they have pegged them but this has to go through negotiations because they want you to do the same! The second (which includes the previous option) is what this blog is about. Since, the external sector creates problems for demand management, one can only think of coordinated efforts by institutions running the world economy, working to achieve higher world demand instead of contracting it.


  1. Wynne Godley, Keynes And The Management Of Real Income And Expenditure, p135, Keynes And The Modern World: Proceedings Of The Keynes Centenary Conference, ed.  David Worswick and James Trevithick, Cambridge University Press, 1983.
  2. Gennaro Zezza, Fiscal Policy And The Economics Of Financial Balances, Levy Institute Working Paper 569, 2009. Available at http://www.levyinstitute.org/publications/?docid=1161
  3. Wynne Godley and Marc Lavoie, Fiscal Policy In A Stock-Flow Consistent Model, p 79, Journal of Post Keynesian Economics / Fall 2007, Vol. 30, No. 1. Draft version available at http://www.levyinstitute.org/publications/?docid=911

The Quick Rise And Fall Of Keynesianism

Welcome to my blog!

This blog post is about the Great Recession, the imbalances which led to it, the use of Keynesian principles by governments of all nations to prevent a deep implosion and how and why the Keynesian mini-revolution didn’t last long. Suddenly, nobody is asking Are We Keynesians Now? and the economics profession has lost lines of communications with governments. Like a Guns ‘N Roses song that goes

What we’ve got here is failure to communicate, some men you just can’t reach.

Will it take another crisis to revive Keynesianism? While, the author is a die-hard Keynesian, he believes that fiscal policy alone cannot resolve the crisis. Governments are aware of this but government officials give only vague replies when taken to task.

The blog in general is/will be about an approach which has roots in the New Cambridge approach to studying economies and how it can be applied to find political economic solutions to put the world in a sustainable path of growth and achieve full employment. It is also about about the Post-Keynesian theory of Endogenous Money and the Stock Flow Coherent Approach. Using the blogosphere as a medium to satiate my crave to put forth my understanding of how economies work, I aim to make a difference. Post-Keynesians emphasize that monetary economies function differently from the chimerical neoclassical story and money cannot but be endogenous. I plan to take the reader into how the monetary and financial system works, the role of various sectors (individuals and institutions) in a demand-led process, their behaviour and what can be done to reverse sectoral imbalances that have built up

Why Keynesianism was short-lived in the Great Recession is a difficult question to tackle in a single post. Before the 1970s, for many years, the world was run using Keynesian principles and suddenly it fell apart. To me, the situation right now is very reminiscent of what went on during the 70s and the 80s (I am not that old!).

Francis Cripps wrote this brilliantly in a 1983 article What Is Wrong With Monetarism [1]

The conclusion which has to be drawn is that, if a modern economic system is to function properly, a mechanism is required for the management of aggregate demand. Now it happens that the need for management of aggregate demand within a closed national economy can be met rather easily. It is easily met because national economies have an institution called the state which is unique in that it has virtually unlimited powers of credit creation or borrowing (or would have within a closed national economy). Keynesians gave up at this point, thinking that once the need for demand management had been pointed out, and the possibility for demand management by a national government had been understood, the problem of demand management was solved once and for all. Unfortunately, there is no such thing as the state in the contemporary international economy at the international level and the absence of the state as such at the international level is, I believe, a sufficient explanation of why the world economy has run into serious problems of recession …

… The important point is rather that in an international economy the possibilities of national demand management are strictly limited. They are limited by problems or balance or payments adjustment and international finance. Governments that wish to regulate national demand so as to sustain full employment run into problems of increasing trade deficits and, in economics with liberal exchange regimes, loss or confidence and outflows of capital. It is actual or potential balance of payments crises which have been decisive in breaking the habit or Keynesian demand management at the national level. Many national governments are still trying but they are trying under difficulties and they are frightened of balance of payments problems that would result if they tried too hard.

Further, as Francis Cripps concluded, in that brilliant article,

… [U]ntil the economists in our society get around to tackling this problem, we risk being stuck with periods of long recession, even if we are occasionally and accidentally favoured with periods of world boom.

In the book From Keynesianism To Monetarism: The Evolution Of UK Macroeconometric Models [2]Peter Kenway writes:

… There is, however, a greater sense in which the development of the Cambridge Group in that period is more important than the model that came to represent them. That sense stems from the historical significance of those ideas…. the ideas were therefore more ‘anti-Keynesian’ than ‘Keynesian’… what makes the anti-Keynesian views of the 1970s Cambridge Economic Policy Group so significant is that they grew out of the very heart of Keynesianism itself …

… On the one hand, as far as the goals it espoused are concerned, of full employment, of steady growth and of government’s responsibility to pursue these ends, the Group’s commitment to Keynesianism never wavered. But on the other hand, as far as the practice of Keynesianism was concerned, and especially the conceptualization of the reasons for the increasing and evident failure of that practice, the Policy Group not only was part of, but in some respects actually led the revolution against Keynesianism in the UK …

(No) Conclusion

Think my blog posts should be short, but this being the introduction needed to longer. Come back for some Kaldorian Monetary Economics!


  1. Francis Cripps, What Is Wrong With Monetarism, pp 55-68, Monetarism Economic Crisis And The Third World, ed. Karel Jansen, Frank Cass, 1983.
  2. Peter Kenway, p 92, From Keynesianism To Monetarism: The Evolution Of UK Macroeconometric Models, Routledge, 1994 (2011 reprint).