A Tiger by the Tail - The Keynesian Legacy of Inflation docx

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A Tiger by the Tail - The Keynesian Legacy of Inflation docx

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[...]... maintained whether it will not itself induce an inflationary wage spiral through the operation of collective bargaining 3 A TIGER BY THE TAIL Shortly after the General Theory appeared, Professor W.H Hutt argued that it was a specific for inflation.6 Even Keynes had doubts, a few years after the General Theory In his essay How to Pay for the War (London: Macmillan, 1940) he warned the trade unions of. .. Theory appeared in 1936.1 Keynes provided a theoretical foundation for these new ways of thinking Since the publication of the General Theory there has been an extensive elaboration of the theoretical system outlined in or generally associated with it, together with a further development of an alternative system of concepts called the Classical system This was close to a mirror-image of the Keynesian system,2... development of a remarkable laxity in credit standards The statistics in this footnote and in the associated paragraph in the text are based on data from The Federal Reserve Bank of St Louis Economic Research available at http://research.stlouisfed.org/) xv A TIGER BY THE TAIL Crude, old-style Keynesianism has thus returned with a vengeance In truth, it never really left Despite all the talk by government... purely monetary factors— not only as a serious and dangerous intellectual error, but as a betrayal of the main duty of the economist and a grave menace to our civilization To the understanding of the forces which determine the day-to-day changes of business, the economist has probably little to contribute that the man of affairs does not know better It used, however, to be regarded as the duty and the privilege... policymakers and central bankers and their macroeconomic advisers that they have painstakingly developed and learned to deploy sophisticated new tools of “stabilization policy” in the last twenty-five years, their tool shed is, in actual practice, completely bare of all but the blunt and well-worn instruments of deficit spending and cheap money For their part, the mandarins of academic macroeconomics have... inflation punctuated by periods of worsening unemployment as was the case during the Great Inflation of the 1970s and early 1980s xvii A TIGER BY THE TAIL The alternative to this, Hayek argues, is to eschew monetary inflation and permit the prices of the unemployed resources to naturally readjust downward to levels that are sustainable at the current level of money income In this case, unemployed labor and... Economists and the Public, published seven months after The General Theory, warned against its inflationary implications, and in several other works that should be better-known than they are maintained that Keynes’s analysis incorporated decisive defects The outstanding critic who was never persuaded by Keynes’s analysis is F .A Hayek, the Austrian scholar, who was teaching at the London School of Economics... Professor Hayek’s critique has accordingly grown His work in general was, perhaps belatedly, recognised in the award of the Nobel Prize in 1974 And in 1975 The Times, which had not been Hayekian in the decades since the 1930s, paid Professor Hayek, in an oblique reference to A Tiger by the Tail, the tribute of identifying him as the economist above all who had accurately diagnosed the progression of. .. Fortunately, there exists an analysis of business cycles of bubbles, crises, and depressions—based on a long tradition of sound economic reasoning that will guide us out of the current morass to a steady and solid recovery If one wishes to learn about this analysis, he or she can do no better than to start with a careful reading of A Tiger by the Tail — Joseph T Salerno January, 2009 3 The Pure Theory of. .. A TIGER BY THE TAIL expenditure, between interest, saving and investment, between the wage level and the level of employment, and so on) But whereas the Keynesian system was couched wholly in terms of aggregates, the so-called ‘Classical’ system contained what may be termed a price dimension: the changes in the price ‘level’ associated with changes in the total money stock were held by the Classical .

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Mục lục

  • Title Page

  • Contents

  • Guide to Extracts and Articles

  • Introduction to the Third Edition, Joseph Salerno

  • Preface

  • Preface, 2nd edition

  • Authors

  • I. The Debate, 1931-1971 (Shenoy)

  • II. The Misuse of Aggregates

  • III. Neglect of Real for Monetary Aspects

  • IV. International versus National Policies

  • V. Wage Rigidities and Inflation

  • VI. Main Themes Restated

  • VII. The Outlook for the 1970s

  • VIII. Addendum 1978

  • Hayek's Writings

  • Index

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