It is significant that Gregory Mankiw, an economist with links to Bush and Romney, should in this excellent article encourage us to approach the current economic crisis through the eyes of John Maynard Keynes.
However, his answer to the question "what would Keynes have done?" ignores an element that would clearly have been uppermost in Keynes's mind - how to get international action to solve the crisis. Keynes would clearly have wanted international coordination of economic policies (monetary and fiscal) between the major economies, and would have wanted international economic institutions (the World Bank and the IMF, both of which he helped to found) to act in ways to free individual countries to take action (e.g. fiscal stiumulus) to overcome the crisis.
Anyone wanting background to this integral part of Keynes' thinking should read Donald Markwell's path-breaking study of "John Maynard Keynes and International Relations, Economic Paths to War and Peace", published in 2006 by Oxford University Press.
Mankiw's argument that it is hard to see how to get effective stimulus to consumption, investment, net exports and even government purchases makes it even more important that the United States provide leadership and encouragement to international action to overcome the crisis - and all the more surprising that in this otherwise compelling article he neglects to say anything about US leadership to get international stimulatory action.
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It is significant that Gregory Mankiw, an economist with links to Bush and Romney, should in this excellent article encourage us to approach the current economic crisis through the eyes of John Maynard Keynes.
However, his answer to the question "what would Keynes have done?" ignores an element that would clearly have been uppermost in Keynes's mind - how to get international action to solve the crisis. Keynes would clearly have wanted international coordination of economic policies (monetary and fiscal) between the major economies, and would have wanted international economic institutions (the World Bank and the IMF, both of which he helped to found) to act in ways to free individual countries to take action (e.g. fiscal stiumulus) to overcome the crisis.
Anyone wanting background to this integral part of Keynes' thinking should read Donald Markwell's path-breaking study of "John Maynard Keynes and International Relations, Economic Paths to War and Peace", published in 2006 by Oxford University Press.
Mankiw's argument that it is hard to see how to get effective stimulus to consumption, investment, net exports and even government purchases makes it even more important that the United States provide leadership and encouragement to international action to overcome the crisis - and all the more surprising that in this otherwise compelling article he neglects to say anything about US leadership to get international stimulatory action.
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