Paul Krugman Explaining Why Economists Got It Wrong

Paul Krugman gives a great lesson in economics.  Even I can understand it.

Keynes did not, despite what you may have heard, want the government to run the economy. He described his analysis in his 1936 masterwork, “The General Theory of Employment, Interest and Money,” as “moderately conservative in its implications.” He wanted to fix capitalism, not replace it. But he did challenge the notion that free-market economies can function without a minder, expressing particular contempt for financial markets, which he viewed as being dominated by short-term speculation with little regard for fundamentals. And he called for active government intervention — printing more money and, if necessary, spending heavily on public works — to fight unemployment during slumps.

He basically gives a quick lesson on macroeconomics and why the pure classical theory just doesn’t work.

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About shaunmiller

I am a Ph. D student at Marquette University. The primary purpose of this blog is to get my ideas out there, and then have other people scrutinize, critique, build upon, and systematize beliefs. This blog will sometimes pertain to what I'm learning in my classes, but it will occasionally deal with non-classroom issues that I'm thinking about as well.
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2 Responses to Paul Krugman Explaining Why Economists Got It Wrong

  1. Kevin says:

    Keynes is so hard to read. I got through about 4 pages of “The General Theory of Employment, Interest and Money” before feeling like a complete moron and moving on to a few articles that summed up Keynes’s economic philosophy. His ideas seem really logical but I understand the argument from capitalists, that the government steps in but never leaves, but I don’t find it a very strong argument. The only real argument ever made that held against Keynes was that Japan and Germany avoided Keynesian economics and prospered, which isn’t a good argument at all.

  2. shaunmiller says:

    I haven’t read his stuff, but I would love to take a class to do so. I almost did, but then I ended up teaching. Alas, I’ll have to learn about economics another way. If I find out more about it, I’ll have to post about it.

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