Saturday, February 22, 2014
I know some people find this hard to grasp, but the effects of economic policies, and the appropriate policies to follow, depend on circumstances. I would add that we know what those circumstances are! Policies like running deficits and printing a lot of money are inflationary and bad in economies that are constrained by limited supply; they are useful and good when the problem is persistently inadequate demand. Similarly, unemployment benefits probably lead to lower employment in a supply-constrained economy; they increase employment in a demandconstrained economy; and so on.
Posted by Dictynna at 1:31 PM