To Keynes or not to Keynes, that is the question
Hard lessons in Keynesian economics
By David Ignatius, WashPost, Wednesday, April 24, 6:52 PM
John Maynard Keynes once said that words should be used aggressively, “for they are the assault of thoughts on the unthinking.” That’s a starting point for an appreciation of Mervyn King, who will retire soon as governor of the Bank of England and who has displayed the quirky intellectual passion of Keynes himself.
Like Keynes, King is a theoretical economist who turned to public policy. He helped guide the British central bank for 22 years, first as chief economist, then as deputy governor and for the past 10 years as governor. He’s one of those mild-mannered Englishmen who can dominate a room the moment he begins to speak, with a wry humor that can amuse, charm and eviscerate at will. I can’t pretend to be objective; King is my former economics professor and longtime friend.
King was in Washington last week for his last round of meetings of the World Bank and International Monetary Fund (IMF). A sign of his influence was a dinner in his honor at the British Embassy that included four current or former Treasury secretaries, three central-bank governors, two top IMF officials and the chancellor of the exchequer.
King sat for a final interview in which he discussed the financial earthquake that has shaken economics in the past decade. In a remarkable admission for a central banker, he said events have shown that “purely monetary stimulus will not be enough. . . . Monetary policy is pushing on a string. It has some effect but less than we might have thought.”
(More here.)
John Maynard Keynes once said that words should be used aggressively, “for they are the assault of thoughts on the unthinking.” That’s a starting point for an appreciation of Mervyn King, who will retire soon as governor of the Bank of England and who has displayed the quirky intellectual passion of Keynes himself.
Like Keynes, King is a theoretical economist who turned to public policy. He helped guide the British central bank for 22 years, first as chief economist, then as deputy governor and for the past 10 years as governor. He’s one of those mild-mannered Englishmen who can dominate a room the moment he begins to speak, with a wry humor that can amuse, charm and eviscerate at will. I can’t pretend to be objective; King is my former economics professor and longtime friend.
King was in Washington last week for his last round of meetings of the World Bank and International Monetary Fund (IMF). A sign of his influence was a dinner in his honor at the British Embassy that included four current or former Treasury secretaries, three central-bank governors, two top IMF officials and the chancellor of the exchequer.
King sat for a final interview in which he discussed the financial earthquake that has shaken economics in the past decade. In a remarkable admission for a central banker, he said events have shown that “purely monetary stimulus will not be enough. . . . Monetary policy is pushing on a string. It has some effect but less than we might have thought.”
(More here.)
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2 Comments:
we've been Keynes-ing for nearly two decades. Time to admit it doesn't work and go back to classical liberalism economics.
Keynesian doesn't lead to hard questions, it leads to hard times.
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