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Friday, 10 October 2008

Deja Vu and Liquidity traps, or where is Keynes when we need him

I confess to have struggled with some of the finer points of macro economics in my student days.

I do remember, however, Keynes analysis of liquidity traps and the animal spirits of capitalists. It somehow seems vaguely relevant to the ongoing financial crisis. Where is the rational calculations that underpin market operations? What we have on the share seems to be anything but rational - decision making driven by fear, uncertainty, lack of trust ...

Marx I think it was said that history repeats itself, the first time as farce, the second time as tragedy ... Or was it the other way around? Looking at current events it is a little hard to tell.

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