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Re: Keynesian economics is not what many think

By: Cactus Flower in ALEA | Recommend this post (0)
Sat, 13 Aug 11 4:33 AM | 23 view(s)
Boardmark this board | The Trust Matrix 		Msg. 05611 of 54959
(This msg. is a reply to 05610 by Cactus Flower)
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Reality is rent through with paradoxes. Even mathematics contains them.

So every discipline is learning how to deal with them. We don't inhabit a classical universe. Newtonian rules apply only in particular conditions.

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The above is a reply to the following message:
Re: Keynesian economics is not what many think
By: Cactus Flower in ALEA
Sat, 13 Aug 11 4:13 AM 		Msg. 05610 of 54959

And this one explains just how much of the world economy has the same problem.

http://krugman.blogs.nytimes.com/2010/03/17/how-much-of-the-world-is-in-a-liquidity-trap/

Companies are hoarding and not employing because unused money is increasing its value (ie deflation) relative to other assets. The Fed is trying to get people to think this isn't such a good idea. So they promise low interest rates, print fresh money (QE) etc.

We're in a trap created by excess responsibility.

Philosophically, this is great fun. Practically-speaking, it sucks. It would be much better if companies put their money to work instead of improving their balance sheets further.

Reading folks like ktc or listening to Republicans, the Fed's policy appears to be working a little bit.


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