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Keynes's difficult idea
Paul Krugman, Keynes's difficult idea
What's been striking me lately is how many people who talk and write about macroeconomics just don't get Keynes's essential point - the fact that economies can suffer from insufficient aggregate demand because people want to acquire liquid assets rather than real goods.
That doesn't seem like such a difficult idea, though I did have to go to Wikipedia and look up "market liquidity" and "aggregate demand." And I'd have to engage in some book learning to discover why getting people to buy goods and services is better for the economy than inspiring them to basically hold money or hold something that's nearly as redeemable as money. The idea makes intuitive sense, but I haven't done the reading in macroeconomics to know the argument.
My guess, though, is that the idea, far from being difficult, is clear but so unexpected for people who don't want to believe it that they simply won't understand that there's something that they need to grasp, and they're unable to shut up what's currently rattling around in their minds, hence don't have the ability to take in new information, or to notice it.
What's been striking me lately is how many people who talk and write about macroeconomics just don't get Keynes's essential point - the fact that economies can suffer from insufficient aggregate demand because people want to acquire liquid assets rather than real goods.
That doesn't seem like such a difficult idea, though I did have to go to Wikipedia and look up "market liquidity" and "aggregate demand." And I'd have to engage in some book learning to discover why getting people to buy goods and services is better for the economy than inspiring them to basically hold money or hold something that's nearly as redeemable as money. The idea makes intuitive sense, but I haven't done the reading in macroeconomics to know the argument.
My guess, though, is that the idea, far from being difficult, is clear but so unexpected for people who don't want to believe it that they simply won't understand that there's something that they need to grasp, and they're unable to shut up what's currently rattling around in their minds, hence don't have the ability to take in new information, or to notice it.