27th September 2011
Many economists have been calling for more government stimulus to boost aggregate demand and economic growth in the global economy. However, Harold Cole and Lee Ohanian of the Wall Street Journal point out that one of the untold stories of the Great Depression and what is overlooked in discussions today, is that growth and recovery came from the supply-side factors i.e. productivity, regulation and technology rather than demand side factors.
David Glaser of Uneasy Money strongly disagrees with Cole and Ohanian and says that they are still presenting a shocking distortion of how recovery really came about during the Great depression. He also adds that monetary policy works "for good or ill".
Nobel Prize wining economist Milton Friedman is famous for believing that economic policymakers should admit their limited abilities when it comes to solving economic issues. Well, here in a video from CNBC, Steve Liesman reports that proposals could be in the works to give the European Financial Stability Fund more buying power in the Eurozone.
One of the worries of allowing Greece to default on its debt is the risk of contagion to the rest of Europe. In his column in The Fiscal Times Patrick Smith comes up with measures that could resolve the issue of contagion.
With the cost of producing money at zero and the global economy appearing to be in a state of liquidity trap. Karl Smith of Modeled Behavior, in true Keynes fashion comes up with an alternative method of distributing money to get spending going again in the economy.
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