2013년 5월 11일 토요일

[발췌: E. P. Caldentey's] Chicago, Keynes, and Fiscal Policy (2000)

자료: Esteban Pérez Caldentey, “Chicago, Keynes, and Fiscal Policy” (Seminar Paper No. 7, October 2000)


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Abstract: 

During the first half of the 1930's, the founders of the Chicago School of economics and John Maynard Keynes in England advocated public works and as a cure for unemployment and a way to overcome the Great Depression. Counter cyclical fiscal policy was seen as a feasible strategy to attenuate the phases of the economic cycle. The quantity theory of money coupled with the hypothesis of wage and price rigidity provided the theoretical underpinnings for this policy proposal. These economists argued that a monetary policy channeled through the banking system was ineffective. In particular, Chicago economists identified two key features that exemplified this restriction: the instability of the circulation velocity of money and the fragility and underdevelopment of the banking system and financial structure. Fiscal policy was thus advocated on the basis of market rigidities and the impotency of monetary policy.

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( ... ... ) In consonance with the early Chicago view, and prior to the elaboration of the GT, Keynes advocated public works in times of recession as a means to economic recovery.

His advocacy of public works, from the time of "Does Unemployment Need a Drastic Remedy?" (1924) and "Can Lloyd George Do it?" (1929) to the Wicksellian framework of the Treatise on Money (1930), sought to provide a palliative measure for the practical consequences of laissez faire. This theory made too many stringent assumptions (i.e., full employment), or was unable to produce the desired results under market imperfections, such as wage rigidity. As put by Keynes (1924), p. 229:
" ... we are brought to my heresy ... I bring in the State; I abandon laissez-faire,─not enthusiastically, not from contempt of that good old doctrine, but because, whether we like it or not, the conditions for its success have disappeared ... it entrusted the public weal to private enterprise unchecked and unaided. Private enterprise is no longer unchecked, - it is checked and threatened in many different ways".
CF. some other quotes of this mention of Keynes:
(...) “ I abandon laissez-faire─not enthusiastically … but because, whether we like it or not, the conditions of its success have disappeared.  It was a double doctrine,─it entrusted the public weal to private enterprise unchecked and unaided.  Private enterprise is no longer unchecked … And if private enterprise is not unchecked, we cannot leave it unaided. ” ( 출처 )

 As he moved on towards the GT, Keynes rested his case for public works basically on the workings of the multiplier. The idea was to show that, under less than full employment conditions, an increase in autonomous expenditures can expand income rather than prices ("The Means to Prosperity" (1933) in CW, Vol. IX, (1972), pp.335-366).

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