Re: Central Banks and Deflation

[pdavidso <pdavidso@xxxxxxx>]

>===== Original Message From Gunnar Tomasson <gunnar.tomasson@xxxxxxxxxxx> :
>
>From the vantage point of Creditary Economics, the "neutrality of money
>axiom" does not merit serious debate - for it implies that the COMPOSITION
>of credit creation and/or fiscal expenditures is a matter of indifference.
>
>In this respect, 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.


 Gunnar if you would read Keynes's 1935 essay on a "Mnetary Theory of
Production"  [ in CWK, vol 13], you will see that Keynesw explicitly indicates
that he is working (in 1935) on a theory that rejects the neutrality of money
axiom in both the short-run and the long -run.  Hence you are just either
uninformed or  crazy to claim that the neutrality of money axiom is a natural
outgroth of the GENERAL THEORY.  By the way, did you ever read the GT --
especially Chapter 17 ??


Paul

Paul Davidson
Editor, Journal of Post Keynesian Economics
University of Tennessee
SMC 503
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