Thursday, February 2, 2012

Bernanke the Keynesian

He answered that clearly during his testimony today, when he said:

As is often the case, the ability and willingness of households to spend will be
an important determinant of the pace at which the economy expands in coming

Only a Keynesian believes that consumption drives the economy rather than production.

Consumers are buying iPhones ONLY because Steve Jobs and his team designed and manufactured them. No production, no consumption.

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