Re: [Pen-l] Re: Reality catches up with catastrophists

["Jim Devine" <jdevine03@xxxxxxxxx>]

 Michael Perelman wrote:
> Is Keynes really that clear?  His descriptions of the monetary side seem
> pretty vague to me.  How else were the US Keynesians able to say that
> his policy was just government spending?

fiscal policy raises M*V by increasing V.

In any event, the key difference between Keynes and pre-Keynesian
business cycle theory is that the latter assumed that we're always
oscillating around potential output.[*]  Keynes, of course, allowed
for the economy to be persistently below potential. Keynes is often
vague, but not about that.

[*] The assumption is also common among so-called "new Keynesians" who
see being above and below potential as symmetrical situations.
-- 
Jim Devine / "Nobody told me there'd be days like these / Strange days
indeed -- most peculiar, mama." -- JL.
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