quoth Krugman:
>A second step would be to accelerate the flow of government spending.
>One of the lessons of the Asian crisis, declared the IMF's Stanley
>Fischer, was that "Keynesianism is alive and well" - increased
>government spending does help the economy.The additional spending that
>will take place as a result of the attack - $45bn approved so far,
>much more to come - will eventually give our own economy a sig
>nificant lift. But there is now a risk that the "wealth effect" from
>last week's market plunge, the adverse effects of stock losses on
>consumer spending, will beat the fiscal stimulus to the punch.
Interestingly, in the most recent issue of BUSINESS WEEK [U.S.], Robert
Barro, an arch-reactionary economist, endorsed Keynesian fiscal
stimulation. In his textbook on Macroeconomics, he used to put Keynesian
economics in a chapter toward the end, treating it as a special case, in
the imaginary world (as he saw it) where prices don't adjust
instantaneously so that "new classical economics" don't apply.
Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~jdevine
