Thursday, January 3, 2013

Not the Treasury View...

In preparing for the lectures this coming term, I've been looking over Chapters 14 to 17 in Sloman, the textbook we use. Particularly Chapter 16 looks at the development of macroeconomics, and the role the UK Treasury, alongside John Maynard Keynes, played in this development.

It's a fascinating story that we'll think about much more in the first few weeks of term. In the meantime though, it reminded me of an excellent blog that I subscribe to the posts from, called Not the Treasury View, and is written by Jonathan Portes at the National Institute of Economic and Social Research. The name harks back to what was the Treasury view back in the time of Keynes, around the Great Depression of the 1920s and 1930s - namely to balance the budget and trust that in the long run the economy would return to equilibrium and growth.

Keynes provided the alternative view, namely that government could, and should do more than this, and actively intervene in the case of deficient demand, as it was argued was the case back then. It's argued by many (for example, see another interesting blogger, John Quiggin here on unemployment) that Keynes was the founder of macroeconomics as we know it, pointing out that the economy as a whole could experience long periods of disequilibrium, characterised by high unemployment.

I'd really recommend subscribing to the RSS feed from Not the Treasury View. You may initially think Portes to simply be a leftie hence a critic of Tory policy, yet if you dig far enough back you'll find he's critical of all government policy that flies in the face of simple economic theory and evidence. Part of the course this term is to start forming coherent analyses of government policy - you can do much worse than become an avid reader of Not the Treasury View.

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