Quotation of the Day…

by Don Boudreaux on September 15, 2011

in Myths and Fallacies, Reality Is Not Optional, State of Macro

… is from page 14 of UCLA Econ Department Chairman Roger E. A. Farmer’s 2010 book How the Economy Works:

Keynesian economists in the Obama administration and their supporters in academia and in the media have not provided an internally consistent theory that explains why the free market fails to deliver full employment.

Keynes’s book, The General Theory, did not provide such a theory.  The book is difficult to read, internally incoherent, and inconsistent with a body of economic theory that has been widely accepted for at least 200 years.  More important, it is inconsistent with the existence of the stagflation that we observed in the 1970s.


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