Prominent Keynesian (and others) add to the ‘post- Crash Economics’ debate

Getting out of our slump is challenging economics policy makers.

Famous Keynes biographer Robert Skidelsky has written in the Guardian about what he describes as common fallacies about austerity. He takes issue with four arguments:

• The "fallacy of composition" (in this case that you can’t live beyond your means)
• The government cannot spend money it does not have
• The national debt is deferred taxation, and
• The national debt is a burden on future generations

It’s very interesting stuff. Skidelsky says “Economics is luxuriant with fallacies, because it is not a natural science like physics or chemistry. Propositions in economics are rarely absolutely true or false. What is true in some circumstances may be false in others. Above all, the truth of many propositions depends on people's expectations.”

This adds nicely to the ‘post- Crash Economics’ debate, which is gathering pace. What is the subject? What new ideas and insights are needed?

Recently I've blogged about the topic and The Economist joined the debate this week too, describing how Britain leads a global push to rethink the way economics is taught. Dambisa Moyo has written on Project Syndicate about the need for a 'Grand Unified Theory' of Economics.

There are some unorthodox fiscal and monetary suggestions here too.