[PEN-L:3796] stock market & investment

[dhenwood@xxxxxxxxx (Doug Henwood)]

The other day, I asked loyal Keynesians to comment on Morck, Shleifer, and
Vishny's 1990 paper showing the stock market to have little effect on
investment - a very damaging empirical refutation of JMK's line on the
malign influence of sentiment on the real world.

That was my second try in the last year or so, and I've received not a
single response. Either I'm preumptuous in expecting one, or Keynesians
have no good defense of the Master's thesis - surely one of the more
important points in the General Theory. I guess I'll have to write in my
almost-finished Wall Street book that JMK was all wet, and his modern
followers are too.

Doug

--

Doug Henwood
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