Tuesday, May 7, 2013

Mark Thoma on Keynesianism and the long run

...and other myths about Keynesian economics

If someone tells you that Keynesianism disregards the long run or that Keynesians don't care about the long run you can quite safely severely discount the value of anything else that person tells you about Keynesianism, period.

How did "the long run is not necessarily a guide to the short run" ever become "the long run doesn't matter" in the first place?


My prior is always to first assume the second option, but others may differ.


  1. Ah yes, Niall Ferguson and his incredibly poor off-the-cuff remark on Keynes's sexual orientation and childlessness.

    Speaking of Keynes's long-run remark...

    If you read it in the context in which he wrote that statement (for those who don't know where that statement appears, it's in his 1923 book, A Tract on Monetary Reform), it becomes somewhat clear that the meaning of Keynes's statement wasn't that the long run didn't matter.

    Let me put it the meaning of Keynes's statement another way, and in a more, direct fashion...one that would sound like it was coming from the mouth of an American rather than a Briton (the Britons, and I mean no offence and I hope I'm not stereotyping, have a tendency to speak and write out sentences that are longer than an American normally would, and tend to say things more subtly than Americans)...

    "WAY TO GO, CAPTAIN OBVIOUS. Just saying that things will come to pass eventually ISN'T the same thing as finding a way to deal with the situation and taking action to deal with the problem!"

  2. plasterer surrey
    I think you are right that the TUC (and all of us) have not done enough to highlight and campaign against the ConDems plans to water down health & safety.

  3. "How did 'the long run is not necessarily a guide to the short run' ever become 'the long run doesn't matter' in the first place?"

    As far as I know, the first maliciously out-of-context use of the "long run" quotation occurs in Henry Hazlitt's Economics in One Lesson: http://mises.org/books/economics_in_one_lesson_hazlitt.pdf

    As this book had, I think, a fairly wide readership on the right, it was probably the main transmission mechanism for the meme. However, I doubt that it was original with Hazlitt.


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