by May 1 2024 William White is right (Letters, April 29) to say that John Maynard Keynes regarded the rate of interest as “highly conventional”, but he should have quoted the whole sentence from chapter 15 of The General Theory: “The difficulties in the way of [full employment] ensue from the association of a conventional and highly stable rate of interest with a fickle and highly unstable marginal efficiency of capital.” It was for this reason that Keynes advocated an active role for fiscal policy. For as he put it in 1932: “The lender, with his confidence shattered by his experiences, will continue to ask for new enterprise rates of interest which the borrower cannot expect to earn.” The current disabling of fiscal policy has thrown the whole onus of demand management on monetary
Topics:
Robert Skidelsky considers the following as important: Featured, Financial Times
This could be interesting, too:
Robert Skidelsky writes Lord Skidelsky to ask His Majesty’s Government what is their policy with regard to the Ukraine war following the new policy of the government of the United States of America.
Robert Skidelsky writes House of Lords Speech – Ukraine: “A wake up call” (International Relations and Defence Committee Report)
Robert Skidelsky writes Speech in the House of Lords – Conduct Committee
Robert Skidelsky writes The American Conservative – Why Is the UK So Invested in the Russia–Ukraine War?
May 1 2024 William White is right (Letters, April 29) to say that John Maynard Keynes regarded the rate of interest as “highly conventional”, but he should have quoted the whole sentence from chapter 15 of The General Theory: “The difficulties in the way of [full employment] ensue from the association of a conventional and highly stable rate of interest with a fickle and highly unstable marginal efficiency of capital.” It was for this reason that Keynes advocated an active role for fiscal policy. For as he put it in 1932: “The lender, with his confidence shattered by his experiences, will continue to ask for new enterprise rates of interest which the borrower cannot expect to earn.” The current disabling of fiscal policy has thrown the whole onus of demand management on monetary policy, which is powerless against the “stickiness” of the long-term rate of interest.