Re: "New" v. "Classical" economics

["John O'Donnell" <jackodonnell@xxxxxxxx>]

"Alan G. Isaac" wrote:
>
> Paul,
>
> There are several possible meaning of
> `the neutrality of money'. Which are
> you talking about?

<<SNIP>>

Another example of economists' penchant to obfuscate the
tautological certainty that the only rational monetary policy is
one that targets the value of money and nothing else.
Translating dQ/dM = 0 into an ambiguous phrase like "the
neutrality of money" does not obviate the tautological certainty
that printing money does not produce goods or services. If they
could get beyond their foolish attempts at simplistic solutions
they may eventually realize that there is a rational explanation
of the appearance of economic activity from such action.

That is, while printing money does not itself cause economic
activity, the inevitable redistribution of wealth that
accompanies any increase or decrease in money may either
increase or decrease economic activity. It is because of this
uncertainty that the outcome can be inflation, deflation,
stagflation or even occasionally a stable value of money.

Some day economists may admit their mistake and leave monetary
policy for its only rational purpose, the control of money
value, and pursue other means to modify the distribution of
wealth and/or purchasing power in such a manner as to reliably
cause positive economic activity.

But then, it's taken a long time for economists to so
religiously hold their false beliefs that one can't expect a
great rush to rationality.

--
			-- jbod

		Tax Privilege, Not People
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