Re: Central Banks and Deflation

["Gunnar Tomasson" <gunnar.tomasson@xxxxxxxxxxx>]

Re. the following:

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

Paul:

Yesteday, I posted the following to John O'Donnell.

If I misconstrued the "neutrality of money axiom," please correct me.

Otherwise, please explain why the "element of scientific truth" in
mercantilism does NOT imply Keynes' embrace of the "neutrality of money
axiom".

Gunnar

********

Jack:

As I understand it, the "neutrality of money axiom" = "money as veil axiom".

That is to say, the economy is moved by "real" - or non-monetary - variables
dressed up in monetary form.

It is the closest thing in contemporary economic scholarship to the
scholastic angels-on-a-pin-head debate.

Gunnar




----- Original Message -----
From: "pdavidso" <pdavidso@xxxxxxx>
To: "Gunnar Tomasson" <gunnar.tomasson@xxxxxxxxxxx>
Cc: <pkt@xxxxxxxxxxxxxxxx>
Sent: Friday, May 23, 2003 5:26 PM
Subject: RE: Central Banks and Deflation


> >===== 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
>
>