Re: Central Banks and Deflation

[pdavidso <pdavidso@xxxxxxx>]

>===== Original Message From Gunnar Tomasson <gunnar.tomasson@xxxxxxxxxxx>
=====

>In other words, "the element of scientific truth" in mercantilism concerns
the chain of causality which runs from (a) favorable balance of trade, (b)
influx of the precious metals, (c) reduced domestic rate of interest, and (d)
increased inducement to home investment.
>
>For Keynes, therefore, the prosposition that (c) as instrument for attaining
(d) is a function of the QUANTITY and NOT the COMPOSITION of money injected
into the domestic economy accords with "scientific truth".
>
>Hence my suggestion that "it would seem that the "neutrality of money axiom"
is, if not implied by, a natural outgrowth of the MACRO approach to monetary
and fiscal policy issues popularized by the General Theory."


I'M SORRY gUNNAR BUT APPARENTLY YOU DO NOT EVEN UNDERSTAND WHAT THE NEUTRALITY
OF MONEY AXIOM MEANS!

PAUL

Paul Davidson
Editor, Journal of Post Keynesian Economics
University of Tennessee
SMC 503
Knoxville, Tennessee 37996-0550
office phone #;(865)974-4221; office fax# (865)974-1686 or (865)974-4601
home phone and fax # (865)692-0802
email pdavidson@xxxxxxx
http://econ.bus.utk.edu/davidsonextra/Davidson.html