Been There Done that: The Political Economy of Déjà Vu

47 Pages Posted: 20 Feb 2011 Last revised: 14 May 2012

See all articles by Peter J. Boettke

Peter J. Boettke

George Mason University - Department of Economics

Daniel J. Smith

Middle Tennessee State University - Department of Economics and Finance

Nicholas A. Snow

Wabash College - Economics

Date Written: February 19, 2011

Abstract

n 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.

Keywords: Financial Crisis, Keynesian Economics, Inflation, Housing Bubble, Regime Uncertainty, John Maynard Keynes

JEL Classification: A11, B53, N40

Suggested Citation

Boettke, Peter J. and Smith, Daniel J. and Snow, Nicholas A., Been There Done that: The Political Economy of Déjà Vu (February 19, 2011). GMU Working Paper in Economics No. 11-13. Available at SSRN: https://ssrn.com/abstract=1764273 or http://dx.doi.org/10.2139/ssrn.1764273

Peter J. Boettke (Contact Author)

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States
703-993-1149 (Phone)
703-993-1133 (Fax)

Daniel J. Smith

Middle Tennessee State University - Department of Economics and Finance ( email )

MTSU Box 190
1301 E. Main St.
Murfreesboro, TN 37132-0001
United States

HOME PAGE: http://www.danieljosephsmith.com/

Nicholas A. Snow

Wabash College - Economics ( email )

P.O. Box 352
Crawfordsville, IN 47933-0352
United States

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