Dueling Economists

Allen, Charlotte, The Weekly Standard, July 1, 2013.


“In the long run, we are all dead,” Keynes famously declared, throwing down the gauntlet to classical economics. He believed that governments have a duty to intervene in the short run to smooth out the harsh effects of fluctuating business cycles. He argued that such phenomena as recessions and falling prices (deflation) were the result of an irrational discordance between savings and private investment at the low end of business cycles, when potential investors might be reluctant to put their money into the capital equipment that could generate the production of goods that would lead to higher employment among the producers.

Weekly Standard