Krugman Doesn’t Understand IS-LM, Part 2

by Steve Keen, Debunking Economics Read Part 1. Krugman’s explanation of our crisis today is straight from the pages of John Hicks’ (pictured) 1937 explanation of the Great Depression (though curiously, Hicks himself didn’t mention the actual state of the global economy at all in his 1937 paper, which attempted to explain the relationship between …

Krugman Doesn’t Understand IS-LM, Part 1

by Steve Keen, Debt Watch Read Part 2. Krugman describes himself as a “sorta-kinda New Keynesian” (Krugman 2012, p. 104), and explains in End This Depression NOW! (Krugman 2012) that New Keynesian macroeconomics evolved in reaction to the failure of the New Classical approach to “explain the basic facts of recessions” (Krugman 2012, p. 103). His …