Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Stagflation was a real economic phenomenon, it wasn't "made to happen". And it was indeed seized upon by monetarists to discredit Keynes. And Austriand and Ordoliberals latched on to monetarism because they agreed with the policy prescription of the monetarists (in the 1970s environment, monetary contraction). And then what had happened was rationalised and blended with pre-Keynesian economic thought, and since 2007 monetarists have found to their horror that the actual political power rests with the Austrians. Now the policy prescription on which Keynesians and monetarists agree is one of monetary expansion, with disagreement on whether fiscal stimulus in necessary or just not harmful. But the common-sense conservative hard-money view hasn't been discredited yet. Austerity is just being tweaked around the edges. And here we are.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue Jul 1st, 2014 at 07:22:09 AM EST
[ Parent ]

Others have rated this comment as follows:


Occasional Series