Keynesian Economics

>>2103071
Because the only refutations to it are in MS paint.

File: adam-carolla.jpg (240KB, 618x412px) Image search: [Google]

240KB, 618x412px

>>2103077
Ha

>>2103071
>used by the vast majority of governments worldwide
Every single western nation abandoned Keynesian economics decades ago, friend.
It is all about the unending nightmare of Neo-liberalism now.

File: 200[1].gif (2MB, 356x200px) Image search: [Google]

2MB, 356x200px

>>2103077

>>2103071
>being this dense
you are making this overly complicated. He said when poor gets money they spend it. When rich gets money they don't spend cos they already have whatever they want. To create demand give money to poor. Is it hard to get?
>>2103114
some keynesian economics are still in effect

File: m3z5y72JUJ1qjic3ro1_1280.jpg (45KB, 605x412px) Image search: [Google]

45KB, 605x412px

>>2103077
>>2103111
>>2103122
>I am unable to refute the mathematics laid out perfectly in the image and this triggers me so that means you're wrong

lol

File: 1481897150973.jpg (2MB, 488x5919px) Image search: [Google]

2MB, 488x5919px

>>2103114
>Every single western nation abandoned Keynesian economics decades ago, friend.
>It is all about the unending nightmare of Neo-liberalism now.
BULLSHIT

The entire fucking world is on a fiat currency and the government can inflate the money supply anytime it wants.

What the fuck is "neoliberal" about this?

It CERTAINLY isn't free market.

>>2103143
>you are making this overly complicated.
There's nothing complicated about it.
Keynes mathematics was horribly wrong.
The entire core of his theory is bullshit.

File: 1392358209587.jpg (156KB, 960x613px) Image search: [Google]

156KB, 960x613px

People who defend keynesian economics and/or the current fiat currency system the world now faces love debt slavery and poverty.

They enjoy wall street getting billions of dollars and think this will magically help the poor and middle class.
They want you to never be able to buy a house because they want the prices to keep going up. They want you to never be able to save money.

>>2103456
Do you know why exactly that countries chose to go off the gold standard?

>>2103466
>Do you know why exactly that countries chose to go off the gold standard?
Because their authoritarian governments spent too much and wanted to be able to spend more without having to increase taxes?

The USA got off of it because they couldn't pay their debts in gold.

All this does is reduce living standards for the poor and middle class.

>>2103448
t. austrian

>>2103470
>All this does is reduce living standards for the poor and middle class.

How were those living standards in 1932?

>>2103477
>How were those living standards in 1932?
Terrible because the government was massively intervening in the economy, not allowing the economy to restructure itself after the fed created an artificial boom.
https://mises.org/library/hoovers-attack-laissez-faire
https://www.cato.org/publications/briefing-paper/herbert-hoover-father-new-deal

inb4 >mises

Meanwhile in 1920 there was a recession that started off worse than the great depression, it was over in less than a year because the government didn't do ANYTHING.
If fact for most of american history the standard practice to cure recessions was to let it ride out and allow the economy to restructure.

>>2103473
t. no argument keynesian who gets upset that his math is wrong

http://www.economicsdiscussion.net/keynesian-economics/keynes-theory/keynes-theory-of-investment-multiplier-with-diagram/10363

That image was made in some serious bad faith.

I know this is bait, but the equation should be:
Y = C(Y) + I(Y)
Otherwise you are assuming a priori that C and I are exogenous variables, which is the point that the pic is trying to prove. So you are assuming your conclusion.

>>2103071
Because it's useful for politicians and banksters and it's easy to sell to dumb people. And when it fails just blame free market.

File: 1470371101364.jpg (25KB, 450x460px) Image search: [Google]

25KB, 450x460px

>>2103071
>Why is Keynesian economics taken seriously and used by the vast majority of governments worldwide when it's based off logical fallacies and faulty mathematics?

No idea anon

>You'd think our leaders would be intelligent enough to not have debunked theories as the core of their economic system.

Yeah honestly you'd think by now they'd be moving on to complexity or behavi--

>We've been off the gold standard since like 1970.

File: 1466852114771.gif (3MB, 640x266px) Image search: [Google]

3MB, 640x266px

>>2103789
>cato
>mises

>>2103071
The math is full retard.
>Let's assume income equals 9 units of consumption and 1 unit of investment
>Let's increase investment by 1
>Let's then assume Y = 9 +1 + 1 and not 8 +1 + 1
I don't know shit about economics but the whole point of k is being the partial derivative of Y in regards to I. So k equals 1 if all change in investments is because income increases and not consumption decreases.

If for example we assume than Y = 8 + 1 + 1 we have k = 0. If we assume that Y = 9.5 +1 + 0.5 we have k = 2. I don't know how the fuck you can derive Y = kl from that mess. Did he just fucking think partial derivative of Y in regards to I equals Y over I? Then just went with LMAO K = Y/I Y = KI C + I = KI What a fucking brainlet.

>>2104722
I probably shouldn't use partial derivative there. It's actually just growth of Y in regards to growth of I. We're supposed to probably interpret is as ratio of how much income went into investments.

>>2104771
That's incorrect.

>>2104789
I don't know what exactly is incorrect but where the picture is fucked up is.

Y=kl which should be delta Y = k * delta I . Which is correct since delta Y equals delta I + delta C.

File: 1471804967051.png (54KB, 183x275px) Image search: [Google]

54KB, 183x275px

>awkahully the austrian school of economics has a solution. in fact, von Mises once said...

>>2104560
>refute
>not even a source
>lol

>>2103456
What that image fails to mention is that the Fed also decreases the money supply, causing deflation. They just haven't done it recently because of 2 recessions in 10 years.

Actually, if you read Smith, you'll see that gold always deflates in the long run, and is a very unstable backing for currency. He discusses it in reference to rents.

Moreover, while I'm not pretending Iraq and Libya weren't about oil, they didn't cause any recessions. In fact, both wars or whatever you call them started during recessions. Wars tend to be positive shocks anyway.

Lastly, neo-liberals oppose the gold standard.

https://en.wikipedia.org/wiki/Professional_consensus_of_economics#Examples_of_consensus_among_economists

File: 128547-004-06118E75.jpg (30KB, 365x375px) Image search: [Google]

30KB, 365x375px

>>2103071
Historical School master race.

>>2107078
>you'll see that gold always deflates in the long run,
If you read Smith, one of the major price indexes has corn, one of the most stable crops in measuring real value, increasing in price steadily over time. What a crock of shit, nowhere in The Wealth of Nations does it say that Gold 'deflates in the long run'

>>2103071

all practicaly applyed economic theory is based on ideology and is adopted as policy based in what the ruling elites that decide on economic policy see as profitable, all practicaly applyed economic theory miserably fails, keynesian economics had their failures, neoliberal free market bullcrap failed over and over again, there is rarely any more justification or logical argumentation for any practicaly applyed capitalist economic theory than there was for literaly applying marxism, and the results are often just as bad

>>2107586
Your reasoning sucks just as bad as your spelling.

>>2107590

history sucks too, but it supports my reasoning

>>2103456
Neoliberals support central banking, unlike libertarians

>>2107698
Right, but Von Mises didn't necessarily abhor central banking, he just didn't agree with the capital injections.

>>2103463

>They enjoy wall street getting billions of dollars and think this will magically help the poor and middle class.

This is the exact opposite of reality.

>They want you to never be able to buy a house because they want the prices to keep going up. They want you to never be able to save money.

Bankers want a gold standard and deflation because it increases the real value of debts that they hold.

>>2103448

>austrians
>using mathematics

lol

>>2107567
He compares rent paid in gold and silver to rent paid according to the value of corn, and notes that the rents paid in terms of crops have not decreased in value, but the rents paid in silver and gold have decreased in value significantly.

> economics
> on /his/

at first I was overwhelmed by the amount of retarded people itt, but than I remembered I am on /his/ -- a safespace for libtards, commies and lolbertarians, who are completely out of touch with economic science

>>2108688

Educate us, then.

>>2103071
Keynesian economics was used for the majority of the "gold standard" period, you fucking philistine.
https://en.wikipedia.org/wiki/Post-war_displacement_of_Keynesianism

It was replaced by neoliberal economics along the lines of Friedman.

>>2108728
http://www.google.com

all leftists do when challenged is scream "READ A BOOK" so I don't feel the slightest bit of guilt telling you to fuck off

>>2103456
>What the fuck is "neoliberal" about this?
The fact that international capital can move freely between nations.

Keynes wanted international capital movements restricted by the use of an international clearing union, with all currencies pegged to an accounting unit called the Bancor. The bancor would be backed by gold.

https://en.wikipedia.org/wiki/Bancor

>>2103789
>mises
https://mises.org/library/children-and-rights
>Applying our theory to parents and children, this means that a parent does not have the right to aggress against his children, but also that the parent should not have a legal obligation to feed, clothe, or educate his children, since such obligations would entail positive acts coerced upon the parent and depriving the parent of his rights. The parent therefore may not murder or mutilate his child, and the law properly outlaws a parent from doing so. But the parent should have the legal right not to feed the child, i.e., to allow it to die.2 The law, therefore, may not properly compel the parent to feed a child or to keep it alive.

>>2103071
>thinking being off the gold standard means you're implementing keynesian economics
top lel.
this is the death throes of chicago school economics, we've not really had keynesianism impleneted ever.
sure, some smatterings here and there but not the real thing.
after the gfc everyone who cut suffered a double dip
america didn't thanks to it's governmental system that makes getting policies through impossible

File: 1454994178933.png (77KB, 538x305px) Image search: [Google]

77KB, 538x305px

really makes you think

>>2108912
After the stagflation of the early 70s Keynesian economics were abandoned. So this makes sense.

>>2108912
What do you imply with that graph?

>>2108918
I know.

It destroys me.
>Oil shocks cause stagflation.
>Neoliberals see their chance and promise the solution is to abandon Keynesianism
>Due to international circumstances, the neoliberals take credit for "saving the economy" when actually what they've done is start a roller-coaster nightmare that may never end.

And even that short-form story leaves off the key part about needing to shackle international capital flows if you want prosperity. (Which ended before stagflation, but were inevitable from the day the dollar was created as the central currency of Breton-Woods instead of a specifically designed reserve currency.)

>>2108921
The end of postwar Keynesianism was a horrible mistake.

>>2108941
The end to """""Keynesianism""""" was inevitable, the oil shock hastened it.
Kalecki predicted why, and it proved to be so.

>>2108728

https://ocw.mit.edu/ans7870/14/14.01SC/MIT14_01SCF11_rttext.pdf

http://2012books.lardbucket.org/pdfs/theory-and-applications-of-macroeconomics.pdf

This

>>2108957
>Kalecki
Remind me, was he the one who said Keynesianism would fall because even though profits may be higher and the economy overall stronger, the ruling classes would get uneasy at the extra power full-employment gave to labour and conspire to destroy it to retain their social status?

>>2108949
>implying modern governments want to spend
money
did have your head up your arse for the last 40 years.

>>2108961
that's the one.

>>2108963
But then we're stuck with literal baby murder.

>>2103114
>let's raise taxes, expand bureaucracy and reduce rates down to almost zero so tons of helicopter money circulate
>neo-liberalism

>>2108888
Ohhh Mr high and mighty is just SO busy making his fortune while lifting and banging his qt wife all at the same time that he can only briefly describe how smart he is on 4chan rather than actually contribute to the conversation.

Seriously, shit or get off the pot.

>>2109005
>I have no idea what the hell is happening in the world, but if it's bad I'll blame the same people I always blame

>>2109005
Neoliberals cut taxes for the richest while transferring the tax burden onto the middle and lower classes. At least that was the case with Thatcher.

>>2103071
Why is market economics taken seriously at all?
They are virtual systems that use the environment they are in, in a way that is inherently unsustainible.
All wealth in the economy ultimately comes from the explotation of natural capital,
Economics is the study of monetary dynamics
Money isn't based on the material it's used to trade.
Now we have more asphalt and concrete than biomass. This is a retarded practice that is going to kill us all, mark my words.

>>2108588
That could be for a couple different reasons. With an expansionary colonial policy, it is obvious that the amount of farming is going to be immense. The rent is going to be very low as a result of this, in addition to the increased demand for corn because of a rapidly increasing population, this could be the result of what you're seeing.

Although there were several reasons why Gold and Silver would have deflated so considerably during the time period you're thinking of. The mining operations in South America were very intensive at the time and created a huge amount of expansion in the total gold and silver of the exchange media.
Admittedly, Gold and Silver do go through periods of deflation, but their tendency is not to deflate over time, but to inflate as noticed in the 20th and 19th centuries.

Isn't inflation supposed to be good for debtors? The value of each piece of currency is less so they're giving up less to pay off their debts

>>2109073
You were supposed to reply "No, that's the beautiful part..."

>>2108963
Like Bible thumpers would ever tolerate such a thing

>>2109111
Yep.

>>2109071
>all the shit tier countries tax least

>>2109111
Yep. Cross of Gold speech and all that. Additionally, because gold is inherently deflationary, the value of debts actually goes up over time.

>>2109251
Again, the only reason Gold would be inherently deflationary would be in the value of the unit of Gold continually went up, which is not the case.

>>2109059

a marxist motherfucker that is stuck in 19-th century itt

>>2109324
He's not a Marxist, he's an environmentalist. And he's exactly correct, in fact it's one of the strongest arguments against the current trend of corporatism.

>>2109268
The only reason Gold wouldn't be deflationary is if we assume the gold supply increases in direct proportion to the economy.

There's a fixed amount of gold on the earth, but not a fixed amount of people.

>>2108912
Factor in total compensation then show me what the graph looks like.

Here I hate to have to use Wikipedia, but use this:

https://en.wikipedia.org/wiki/Gold_as_an_investment#Gold_price

When people use the indexes at the back of Book one of the Wealth of Nations to say Gold is inherently deflationary, it really winnows my husks. This chart depicts entire decades of steady Gold or a slight decrease of Gold's price in USD, not even accounting for inflation.

Suck it nerds.

>>2109344
>There's a fixed amount of gold on the earth,
But like any other good exchange media, it constantly increases...

>>2109346
Why did it take until ~1975 for non-wage compensation to be be popularized, assuming the graph doesn't already factor it?

>>2108912
Does this have anything to do with Bretton Woods?

Why is it necessarily the abandoning of Keynes' policies causing this? Are you kidding me? Such a broad graph, to be cornered and say it was the cause of one thing entirely... there were so many different things going on at the time.

>>2109372
I don't know, why would the abandoning of an economic ideology intended to maintain full employment and replacing it with one that accepts a natural rate of unemployment have any effect on labor-compensation?

>>2109350
Although looking at this graph it pokes a hole in one of Von Mises' cardinal theories: that being a media of exchange causes the value of the commodity to increase. Exactly the opposite happened. Lol.

Although it was the gold-exchange standard dropped under bretton woods, not the gold standard so maybe that's why.

>>2109377
It might have some effect but not the entirety of the discrepancy of productivity to actual compensation being determined there.

>>2109383
There are other factors, naturally, like outsourcing.

But then Breton-Woods also made moving capital around internationally more difficult and most nations had exchange controls at the time, so that's naturally linked into the system.

>>2103071
>used by the vast majority of governments worldwide
The consensus broke down in 70s.
>logical fallacies and faulty mathematics
You do realise Keynes was a mathematician? He wrote one of the most famous books even on probability.
>We've been off the gold standard since like 1970. What do we have to show for it? Everything is shit for the middle class.
Oh look a goldbug. Nothing to see here.

File: Werner_sombart.jpg (11KB, 228x273px) Image search: [Google]

11KB, 228x273px

>>2107145
My nigga.

It's funny how so few people pay attention to the economical school that actually has a record of success.

File: venezuela line for food.jpg (56KB, 600x418px) Image search: [Google]

56KB, 600x418px

I don't know what to think about this, seriously. Keynesianism had undoubtedly a good run during the so-called "Golden Age of Capitalism" from 1945 to 1973. On the other hand, I'm Latin American, and economists who call themselves "Keynesians" have ruined some countries in the region, like Venezuela, Brazil and Argentina, in the last decades.

>>2109475
Venezuela is getting their shit fucked right now because their mandated rate is overvaluing their currency by like 90 times what it should be, so they support the black market with policies like that.

>>2109475
I would raise that none of those countries were ever exactly world leaders in stability and prosperity.

>>2108912
>>2109359
Concerning productivity, productivity has increased as well as compensation.

"Conventional wisdom holds that worker productivity has risen sharply since the 1970s while worker compensation has stagnated. This belief rests on misinterpreted economic data. Accurate and careful comparisons show that over the past 40 years measured productivity has increased 100 percent and average compensation has risen 77 percent. Inflated productivity measurements account for most of the remaining 23 percentage point difference. An apples-to-apples comparison shows that employee compensation continues to closely follow productivity. American workers continue to earn more as they become more productive. To help Americans advance economically, policymakers should seek policies that will increase productivity."

Looking at this chart: http://www.heritage.org/.../bgproductivityandcompensation... it appears that wages have stagnated, but productivity has increased, but this chart ignores benefits unlike the one that is shown in this post. Wages and total compensation are different. Wages simply show the money that is made without benefits. Total compensation takes into account of wages and benefits. A case could be made to say that benefits don't matter I suppose and only wages do. This is a pretty decent conversation between the writer of this article http://www.forbes.com/.../us-wages-contrary-to-the-usual.../ and one of the commenters.

>>2108912
>>2109359
2/2
Commentor: Hey Tim, just wondering a couple of things here.
You talk about real product compensation tracking well with productivity, but might this still mean that Americans have less take-home money in their pockets?
I’m asking specifically about two of the things you mentioned as part of RPS: health care insurance and employer paid taxes.
I’m an economic neophyte (so bear with me), but it seems to me that health care insurance provided by the company, while undoubtedly a benefit to many employees and their families, isn’t really much of in the way of compensation given the huge costs in healthcare in the U.S.? Could it be that RPS tapers off because of a slowdown in rising healthcare costs due to the ACA, or is it (more likely) due to the recession?
And employers paying taxes on employment is an expense yes, but that isn’t really going into workers pockets is it? Unless i’m totally missing something.
It seems that net income might be a lower overall percentage of RPS, and that is the issue Democrats are interested in rectifying.

Tim: Sure, less money in pockets. But health care and taxes are things that the employer must pay to employ someone. So that’s what should track productivity.
Consider the taxes for a moment. You’ll get a slightly different reaction if you tell people their wages aren’t going up because employers are tight, or wages aren’t going up because taxes have gone up. Which could be why the people generally in favour of taxes going up keep telling us that employers are being tight.

>>2110205
Again: Why did it take until 1975 for employees to start providing benefits instead of just wages? Why the divergence then?

>>2108912
>>2109359
3/3
"Many academic and policy researchers dispute this conclusion. Harvard Professor Martin Feldstein, the former President of the National Bureau of Economic Research, concluded that the apparent divergence results from using the wrong data to measure pay and productivity.[6] Using the correct data, he finds that pay and productivity have both grown together. Dean Baker, director of the left-leaning Center for Economic and Policy Research, and staff at the Federal Reserve Bank of St. Louis also come to that conclusion.[7] Georgetown Professor Stephen Rose likewise finds that the apparent gap between pay and productivity collapses under scrutiny.[8] He concludes that economic growth resulting from productivity growth continues to benefit working Americans."
http://www.heritage.org/.../productivity-and-compensation...

Sources for the footnotes are in the link. But, left and right wing econ think tanks agree upon this.
They also go into measurements for inflation and how that can help interpret or misinterpret data.

Another source on this that isn't as long as the heritage one

>>2110205
>heritage foundation.
Ah, yes.
Also:
>Workers with fewer skills have benefited far less from technological advances. Employment—especially of less-skilled workers—has shifted toward the service sector. Service-sector jobs are typically more labor intensive and have experienced slower productivity growth than jobs in the goods-producing sector. It takes as many people today as in the 1970s to feed residents in a nursing home, clean a building, or wait tables in a restaurant. Median productivity has risen less than average productivity.

>Many analysts have produced studies pointing out the gap between median compensation growth and average productivity. They are correct, but draw the wrong conclusions. The economy does not face a large “divergence between pay and productivity.” Rather, productivity has not risen as fast among some groups of workers. Policymakers should not try to reconnect pay and productivity; they diverge only slightly. Rather, they should look for ways to make less-skilled workers more productive, such as reducing the cost of higher education. Market forces will then force employers to increase compensation.

I'm not a fan of these conclusions
#1 The move to the service sector amongst unskilled workers is in itself a worrying trend (and partially explains a divergence between productivity and average wages: If you're unemployed because the factory now uses Robots, so you work in McDonalds, you have suffered from a divergence in wages and productivity. While the workers who didn't get fired will see wage increases, you're only going to see a decrease. The productivity gain was to your disadvantage.

This doesn't mean you're being "underpaid" so to speak (diverging from the implications of the chart) but it doesn't make the problem any less real. It also cuts into the problem of growing income inequality, which is perhaps the ultimate point of the largest chart - those on the top get all the benefits of productivity, you get fucked.

1/2

>>2110249
#2 If unskilled workers had more access to higher education (and I'll bet the policy proposal to do so is deregulation, not state interference), it doesn't follow immediately that their wages would increase. Indeed, the increased supply of skilled workers could just start dragging down the wages of that class as well. As noted, it takes the same number of people to clean a building as it once did while other sectors can increase productivity. That may mean you just find yourself cleaning a building with a degree in computer science.

>>2103463
I thought the Fed didn't print money

>>2110263
all banks print money