Krugman discusses the Cardiff Garcia article here. It divides demand-siders into "fiscalists" and "monetarists". Monetarists is tricky because that already has significance for a theoretical perspective, but I like the term "fiscalists" because it would really help to clarify a lot of sloppy discussion of what Keynesianism is if the policy view is just given a different term. Of course most Keynesians are probably fiscalists (some might not be - for example, John Taylor), but if you had a separate term for a normative, policy perspective people could be more clear about how they use the word "Keynesian".
Krugman goes through his own policy thinking on the relationship between monetary and fiscal policy, but that's mostly old hat. I think everyone gets that except for Scott Sumner acolytes, and I honestly can't imagine they've actually missed that - they just need something to whine about so they say Krugman doesn't think monetary policy makes sense at the ZLB.
Friday, June 14, 2013
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Interesting - though I'd probably say that most contemporary New Keynesians are monetarists in most circumstances, though Garcia is mainly talking about current circumstances. When I think about fiscalists I think people like Jamie Galbraith and all of the Post-Keynesian subsets. Supply-siders too - strange bedfellows.
ReplyDeleteI've actually been trying to come up with a word to describe people who think that "demand management" is also when government intervenes in markets in various ways rather than just the "Keynesian" idea of changing G and T. For instance, The Home Owners Loan Corporation and/or FHA insurance are not "Keynesian" programs, they are something different. It is admittedly a subtle, but I think important, difference.
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