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Quotation of the Day…

… is from Gerald P. O’Driscoll’s and Sudha R. Shenoy’s superb 1976 essay “Inflation, Recession, and Stagflation” (published as a chapter in Ed Dolan’s landmark collection, The Foundations of Modern Austrian Economics):

[I]ndeed, the Keynesian concept may be said to be that of full unemployment, that is, the implicit assumption that all goods and services are available in abundance, so that output and employment can be increased by all firms simultaneously.  Or, to put this point somewhat differently, the level of unemployment and excess capacity at the bottom of the cycle is assumed to be uniform throughout the economy.  The substantial variations, in both unemployment and excess capacity, as among different firms, industries, and regions, are disregarded in the Keynesian framework as having little analytical significance.