I asked this question on Post-Keynesian thought a year or so ago, and got
no satisfactory answers. With the strong U.S. employment report released
this morning - payroll growth of over 400,000, a drop in the unemployment
rate to 4.6% (the lowest in 24 years), and real wage growth approaching 2%
- I'll try it again. Most Keynesians, regardless of whatever modifier you
want to use, would have predicted several years ago that a policy mix based
on deficit reduction and sustained high real interest rates would provoke
stagnation, and not what we've seen over the last 3-4 years. Why have
things turned out the way they have?
Doug
