[PEN-L:3803] Re: stock market and investment

[JDevine@xxxxxxxxxxxxxxx]

I haven't read Mork from Ork, et al's paper but it makes sense to
me that one could reject the causation of stock-market events -->
real investment. But, as Chris N. says, doesn't mean that Keynes
was wrong. Didn't Keynes say that speculative bubbles could pop
without having any effect if the situation outside Wall Street
was hunky-dory but if not, a Wall Street panic could have an
impact?  (His prose was better than mine.)

So Mork and all those guys should have tested a different
hypothesis in terms of: stock market events + specific extra-Wall
Street conditions --> investment (with the relationship between
the stock market and the extra-WS conditions is more a matter of
complementarity than simple addition). In short, they tested the
wrong hypothesis if they are seen as testing Keynes.

I, for one, see the stock market crash of 1929 as a possible
trigger for the 1929-33 downslide. My emphasis would be on the
pre-existing instability of the US and world economies, however.

Gary writes as if Paul Davidson is on pen-l, which of course he
isn't.  He would know the quote about industry and speculation
that I referred to above. My GT is in the shop.

in pen-l solidarity,

Jim Devine   jdevine@xxxxxxxxxxxxxxx
Econ. Dept., Loyola Marymount Univ.
7900 Loyola Blvd., Los Angeles, CA 90045-8410 USA
310/338-2948 (daytime, during workweek); FAX: 310/338-1950
"Segui il tuo corso, e lascia dir le genti." (Go your own way
and let people talk.) -- K. Marx, paraphrasing Dante A.