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Friday, June 15, 2012

Oh, That's What Keynesian Means?!

Bloomberg.com explains it for us: "Not so long ago, Sweden could claim world leadership in unmitigated Keynesian economics, with a 90 percent marginal tax rate and a welfare state second to none."

And here I thought Keynesianism had to do with boosting aggregate demand during a downturn!

5 comments:

  1. Ya that was pretty nuts... I was particularly surprised to see the author of the piece.

    Not exactly a hack journalist or anything. I'm not sure what he was thinking.

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  2. You left out dampening aggregate demand during booms so that, among other things, the budget is structurally balanced across the business cycle. But yeah.

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  3. Are you sure you construed the sentence correctly? If I say "I baked a delicious cake, with strawberries and chocolate chips", I don't mean strawberries are an essential component of cakes. Admitted, it seems a bit ambiguous as to whether this is a parenthetical clause or a description.

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  4. I have a question regarding this conflation. Can anyone name a country that has a low tax rate, limited regulatory system and a small public sector, but isn't opposed to expansionary fiscal measures during deep recessions? I'll also accept economists, think tanks and political figures/parties that hold hybrid Keynesian/libertarian(ish) views.

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