Odd Lots Why It's A Big Problem That Economists Still Don't Understand Money
Dec 30, 2019
Join Lord Robert Skidelsky, a renowned economic historian and biographer of John Maynard Keynes, as he dives into the pitfalls of economists misunderstanding money. He critiques the lingering misconceptions from the 2008 financial crisis and the limitations of New Keynesian economics. Skidelsky emphasizes the need for government intervention over central bank reliance and discusses innovative fiscal policies like automatic stabilizers. Explore how these ideas could reshape economic thought for the future and address pressing societal challenges.
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Misunderstanding Financial Markets
- Economists wrongly viewed financial markets as efficient and self-regulating.
- This misconception led to a belief that crises like 2008 were unlikely.
The Dual Nature of Money
- Money's dual function as a medium of exchange and a store of value is crucial.
- During uncertainty, people hoard money, reducing spending and causing economic contraction.
Keynes's View on Money
- Keynes emphasized money's inherent influence on the economy, unlike classical economists who treated it as a separate factor.
- Economists often mistake risk for uncertainty, failing to acknowledge the incalculability of certain future events.
