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Keynes wrote that that would be one way - although, he stressed, not actually a good way - of escaping from a liquidity trap. The real irony is that he was act
by crdoconnor 8y ago
Keynes wrote that that would be one way - although, he stressed, not actually a good way - of escaping from a liquidity trap.
The real irony is that he was actually decrying digging gold out of the ground and burying it in vaults as he wrote that and among his critics, that kind of "digging a hole in a ground and filling it up" is typically considered above reproach.
- UncleEntity 8y agoProbably because you aren't literally digging gold out of the ground and reburying it, you are transforming land, labor and capital into a finished product which, in this case, is gold bullion. Be like saying digging a hole and "planting" a fencepost is a wasteful activity because the wood was nearly in the same state to begin with.
- zxcmx 8y agoI think the complaint is that the gold bullion will just be hoarded and used as a unit of account. You could have achieved a similar thing with some strokes of a pen. It's wasted effort in the same sense that bitcoin mining is wasted energy.