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The Rise and Fall of Keynesian Economics

Paul A. SamuelsonJohn Cassidy’s remarkable interview with the Nobel Prize winner Paul Samuelson maybe best describes the rise and fall of Keynesian economics.

Since households need to deleverage, the idea of fiscal spending during periods of weak growth makes sense for non-mainstream economists like Prof. Steve Keen (see why) and for Nomura’s Richard Koo (see why).

Still, Keynesians led the world to two of its most unfortunate experiences, the 1970s stagflation and to the sub-prime bubble.

One remark: Samuelson calls himself a “post-Keynesian”, which is entirely different from the “Post Keynesians”, a movement that, as opposed to the neoclassical mainstream, wants to use Keynesian monetary theory not only for the short-run, but also for the long-run.

 


George Dorgan, snbchf.com

Disclaimer: The opinions expressed above are not intended to be taken as investment advice. It is to be taken as opinion only and we encourage you to complete your own due diligence when making an investment decision. Even if we often write about Forex trading, our advices aren't written for day traders who follow technical channels, but rather for mid- and long-term investors. Our aim is to show discrepancies between fundamental data and current asset valuations, which can lead in mid-term to an inversion to technical channels.
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