I think the "you can't tun out of demand" idea is more universal than just Freshwater economics. Even Keynes resorted to "animal spirits" to explain things. Onc

I think the "you can't tun out of demand" idea is more universal than just Freshwater economics. Even Keynes resorted to "animal spirits" to explain things. Once velocity picked up, you had the Postwar Boom. The connective tissue is that in order to think that, it helps if you think there's untapped demand constrained by monetary policy. At the margins, the cost of additional production is so low that there are multiple deflationary pressures even if everything looks normal. The basic Market Monetarist ( the intellectual sons & daughters of Friedman ) stuff these days is quite interesting. It's very little fun because there's nothing to it to where you can have a "program" - either spending or austerity - to fit the ( lack of ) ideology[1]. So policy makers aren't interested. My favorite Monetarist - Scott Sumner - gets dismissed by such as Paul Krugman, saying that the stories are too hard; that's the politics are wrong[2]. It's not an assault on it even; just a dismissal. Very enlightening. [1] which is in itself an ideology with certain blinders on - one I ascribe to, unfortunately. [2] which I think means it has no politics and resembles control theory too much. If everybody can buy the Monetary Policy expansion pack for MATLAB and check the economists' work, there won't be any economists beyond a level....