Friday, September 9, 2016

The Misdirection of Keynesian Economics

Richard Ebeling emails:

Dear Bob,

I have posted on “Research Gate” a PDF of my recently published essay on, ‘The Misdirection of Keynesian Aggregates for Understanding Monetary and Cyclical Processes,’ which appears in “What is Wrong with Keynesian Economics” edited by Steven Kates and published by Edward Elgar (August 2016).

I explain that the fundamental flaw in Keynesian Economics revolves around the misplaced and misdirected focus on statistical aggregates and averages that hide from view all the underlying microeconomic and market process relationships and interconnections through which change and economy-wide fluctuations play themselves out. They hide from view that what Keynesian economists call "aggregate demand failures" in the form of idle resources and less than full employment have their origin in supply-side pricing problems and rigidities that prevent or delay market adjustment and rebalancing to restore economy-wide coordination in and between output and input markets.



  1. And here I thought it was the denial of Say's Law.

  2. I wonder why government didn't start Uber or Airbnb, with all that excess capacity being unused, they should have paid people to drive around and pay people to put teddy bears in their spare bedrooms.