How Germany's Anti-Keynesianism Has Brought Europe to Its Knees
Levy Economics Institute Working Paper No. 886
43 Pages Posted: 23 Mar 2017
Date Written: March 20, 2017
This paper investigates the (lack of any lasting) impact of John Maynard Keynes’s General Theory on economic policymaking in Germany. The analysis highlights the interplay between economic history and the history of ideas in shaping policymaking in postwar (West) Germany. The paper argues that Germany learned the wrong lessons from its own history and misread the true sources of its postwar success. Monetary mythology and the Bundesbank, with its distinctive anti-inflationary bias, feature prominently in this collective odyssey. The analysis shows that the crisis of the euro today is largely the consequence of Germany’s peculiar anti-Keynesianism.
Keywords: John Maynard Keynes, Mercantilism, Economic and Monetary Union, Euro Crisis
JEL Classification: B31, E30, E58, E65, N14
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