Thursday, October 17, 2013

Krugman wants to talk Hicks and Keynes and savings

How does the IS LM chart produce this behavior.  Savings going up for the private sector as interest rates drop. In fact, under the Clinton policy, all savings went up for eight years, until Bush.

The indication is that the Keynesians stimulus we try out at each recession fails a bit, leaving us with continuing losses. Go ask Krugman, its his theory. He says its causation, government evidently does lousy stimulus because we save too much.
Private savings rise with inflation, the ratio relatively constant. All the changes in savings came from DC, mainly borrowing for the bailouts during a recession, a pattern started with Reagan. That magical upturn never arrived after each Keynesian impulse.

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