Monday, October 27, 2008

Roubini Is Primarily A Keynesian

I have sometimes received the question of whether Nouriel Roubini should be regarded as an Austrian. I have generally answered to that he is primarily a Keynesian, even though he has some Austrian leanings. And I certainly stand by that assessment. Don't get me wrong here. I find Roubini and his RGE Monitor to be interesting to read, and while he remains more Keynesian than Austrian, he does display Austrian characteristics both in his approach (he skips much of the idiotic mathematical formalism prevalent in non-Austrian economics) and in part of his analysis ( he recognice that Fed monetary policy was too loose during the housing bubble and that this was a key factor behind the bubble). But while he has some Austrian leanings (and is therefore more accurate in his analysis than most economists), he remain mainly Keynesian. Kevin Duffy explain why here.


Anonymous yarasa said...

there is a quite popular view out there that current crisis requires keynesian solution since markets are no longer functioning. in addition to fiscal stimulus, it is said that government in the first order should stabilize house prices. while this may not work, is it really that clear that an alternative where government acts as a bystander, and allows for a collapse of major institutions (such as AIG) is a better solution in practice. i would like to hope that that is so. however, it is not clear to me that is a better solution simply considering likely enormous short-term pain. or am i too scared or simply brainwashed by now?

1:08 AM  
Anonymous Anonymous said...

More poison will not cure poisoning. Better to have some short term pain than another 17-year depression because politicians can't remember that command economies fail.

1:55 PM  
Anonymous yarasa said...

well, just imagine millions out of job, with no health insurance, or unemployment benefits to speak of, and no homes to boot! I am not sure what is better. It is not just a pure economic decision, you have to consider the "human costs."

1:08 AM  
Blogger stefankarlsson said...

Yarasa, what you're overlooking is the fact that the Keynesian policies will in fact at least in the long run create more economic problems and so create even more human costs.

9:29 PM  

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