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I See I Have Annoyed the Very Sharp David Glasner: Milton Friedman and the History of Economic Thought Edition - Washington Center for Equitable Growth
Whew. A long quote. But I don’t have time today to cut it down to its essentials–and David is well worth reading.
But in response I say:
David is, I think, correct in saying that Milton Friedman had the wrong monetary explanation of the Great Depression, and Hawtrey had the right one. But it doesn’t matter. Milton Friedman’s was the only explanation North Atlantic macroeconomics heard from 1970 to 2008. And it was the version North Atlantic macroeconomics believed, and so neglected Keynes and Minsky–and Hawtrey. Thus here, I say, is thus annoyed at me not for getting anything wrong but, rather, for reminding him of an unpleasant reality.
David is, I think, also annoyed at me for failing to recognize that the Lesser Depression would have come to a quick end had the Federal Reserve and the ECB committed themselves at the end of 2008 to a permanent 5%/year inflation target, and for instead dinking around with Keynesian fiscal policy and Minskyite credit policy ideas. But the failure of Abenomics to make more of a difference keeps me from being as certain as David is.