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http://www.econedlink.org/lesson/593/Keynes-vs-Hayek-Rise-Chicago-School-Economics http://www.econedlink.org/lesson/593/Keynes-vs-Hayek-Rise-Ch... One of Hayek

http://www.econedlink.org/lesson/593/Keynes-vs-Hayek-Rise-Chicago-School-Economics http://www.econedlink.org/lesson/593/Keynes-vs-Hayek-Rise-Ch... One of Hayek's big points which I count against Keynes is that we still don't fully understand market mechanics. It's as true today as ever. Going back to the initial quote about dentists, too many people think that it's an easily explainable macro-system. I struggle to see how there won't be (and already haven't been) ramifications from printing money to support national economies. Printing more IOUs definitely devalues the existing IOUs.... Call it disinflation or deflation, it does exist. We're seeing it in Japan and in an increase in real (inflation-adjusted) short-term rates which are negative in several countries (Sweden, Denmark, etc).

crdoconnor 9y ago
>One of Hayek's big points which I count against Keynes is that we still don't fully understand market mechanics. That, along with the notion that market mechanics were not necessarily rational, was one of Keynes' main points. He termed it "animal spirits". >I struggle to see how there won't be (and already haven't been) ramifications from printing money Nobody said that there wouldn't be ramifications. >Printing more IOUs definitely devalues the existing IOUs No, not necessarily. If an economy is operating way under capacity it will increase production, dampening inflation: you get the same number of widgets for your IOU it's just there are more widgets built. If an economy is operating at capacity (as Zimbabwe's was), all it will do is devalue existing IOUs.
CalChris 9y ago
Ron Paul made a lot of hay (and fundraising) out of name dropping Hayek. Still Hayek had one idea that is in common use, price signals, but otherwise he's been adopted by a partisan crowd. And the frustrating thing about Keynes is that he failed to acknowledge the simple fact that Keynesian policy only works when every country in the world is not practicing it. This was nonsense.

crdoconnor 9y ago

>One of Hayek's big points which I count against Keynes is that we still don't fully understand market mechanics. That, along with the notion that market mechanics were not necessarily rational, was one of Keynes' main points. He termed it "animal spirits". >I struggle to see how there won't be (and already haven't been) ramifications from printing money Nobody said that there wouldn't be ramifications. >Printing more IOUs definitely devalues the existing IOUs No, not necessarily. If an economy is operating way under capacity it will increase production, dampening inflation: you get the same number of widgets for your IOU it's just there are more widgets built. If an economy is operating at capacity (as Zimbabwe's was), all it will do is devalue existing IOUs.

CalChris 9y ago

Ron Paul made a lot of hay (and fundraising) out of name dropping Hayek. Still Hayek had one idea that is in common use, price signals, but otherwise he's been adopted by a partisan crowd. And the frustrating thing about Keynes is that he failed to acknowledge the simple fact that Keynesian policy only works when every country in the world is not practicing it. This was nonsense.