The Other McCain

"One should either write ruthlessly what one believes to be the truth, or else shut up." — Arthur Koestler

‘Aggregate Demand,’ Again

Posted on | November 15, 2010 | 1 Comment

What is it with this neo-Keynesian stuff? Back in July, Brad DeLong did his little paean to “aggregate demand.” At least DeLong is an economist. Matthew Yglesias, not so much:

So if for whatever reason businessmen or politicians or media figures or anyone else feels more comfortable expressing the situation as one caused by “uncertainty” that’s fine. But the name of the game is still fiscal and monetary expansion. But instead the proposed cure typically seems to be “shift public policy in a more rightwing direction.” That wouldn’t do anything about uncertainty or a shortfall in aggregate demand. It’s just a faux-sophisticated way of saying “I’m a rich businessman who wants politicians to cater to my interests more.”

Yglesias knows all about “faux-sophisticated” ways of saying things. What he doesn’t know is economics.


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