Been There Done That: The Political Economy of DéJà Vu
Peter J. Boettke
George Mason University - Department of Economics
Daniel J. Smith
Troy University - Manuel H. Johnson Center for Political Economy
Nicholas A. Snow
Ohio State University (OSU); George Mason University - Department of Economics
August 1, 2010
THE GLOBAL FINANCIAL CRISIS: ALTERNATIVE PERSPECTIVES ON WHAT WE HAVE LEARNT, pp. 14-45, Steven Kates, ed., Cheltenham: Edward Elgar Publishing, 2011
In the midst of the current financial crisis the economics profession has seen a monumental resurrection of Keynesian ideas. The debate, which Keynes started back in the 1930s, is being picked up again, not where it left off, but in exactly the same place it started. While Keynesian theories were carefully critiqued by new classical economists and in the most part discarded by the profession, Keynesian models and prescriptions became a staple of politics and macroeconomic textbooks. Obviously, neither side of the debate articulated their views adequately and on the same terms. If the economics profession is going to escape this perpetual déjà vu of cycling through the same debate every time an economic crisis emerges, the profession must discard entrenched ideologies and turn back to the sound but creative application of basic economics.
Number of Pages in PDF File: 32
Keywords: Financial Crisis, Keynesian Economics, Inflation, Housing Bubble, Regime Uncertainty, John Maynard Keynes
JEL Classification: A11, B53, N40Accepted Paper Series
Date posted: December 6, 2010 ; Last revised: February 21, 2012
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