mainly macro: The 'strong case' critically examined

Comment of the Day: Robert Waldmann: commenting on: The Strong Case Against Independent Central Banks: "I think it is hard to determine the relative importance...

...of central bank independence and of the myth that stagflation proved that Keynesian economics was invalid.

A remarkably large number of economists thought that Ricardian equivalence implies that temporary increases in public consumption and investment don't cause increased nominal aggregate demand. The fact that Milton Friedman was basically a Keynesian was not (and is not) widely accepted.

Also, I expected you to argue again (as you have before) that a problem with central bank independence is that almost all economic expertise was reallocated from Treasuries to central banks. I thought that was a very good point and it strongly supports your current argument.

Comments