Online ISSN 2286-0266
Print ISSN 1223-0685
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Robert HIGGS
The Independent Institute
As the recession has deepened and the financial debacle has passed from one flare-up to another during the past seven or eight months, commentary on the economy’s troubles has swelled tremendously. Pundits have pontificated; journalists and editors have reported and opined; talk-radio jocks have huffed and puffed; public officials have spewed out even more double-talk than usual; awkward academic experts, caught in the camera’s glare like deer in the headlights, have blinked and stumbled through their brief stints as talking heads on TV. We’ve been deluged by an enormous outpouring of diagnosis, prognosis, and prescription, at least ninety-five percent of which has been appallingly bad. The bulk of it has been bad for the same reasons. Most of the people who purport to possess expertise about the economy rely on a common set of presuppositions and modes of thinking. I call this vulgar Keynesianism. Unfortunately, this way of thinking about the economy’s operation, particularly its overall fluctuations, is a tissue of errors of both commission and omission. Most unfortunate have been the policy implications derived from this mode of thinking, above all the notion that the government can and should use fiscal and monetary policies to control the economy and stabilize its fluctuations. Despite having originated more than half a century ago, this view seems to be as vital in 2009 as it was in 1949. Let us consider extremely briefly the six most egregious aspects of this unfortunate approach to understanding and dealing with economic booms and busts.

ŒCONOMICA no. 2/2009
Keywords: economic crisis, economic theory, keynesian economics, austrian economics
JEL: B53, E12
Recesiune și relansare economică. Șase erori ale teoriei mainstream