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Politics : Formerly About Advanced Micro Devices
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To: neolib who wrote (370528)2/12/2008 1:19:23 PM
From: combjelly  Read Replies (1) of 1577191
 
"You would certainly think from Congress & the Pres running to prime the pump that Keynsian thinking dominates"

One economist stated that "when there is a recession, everyone becomes a Keynsian...".

"and that the mantra is consume at all costs."

That isn't really true. My economics professor pointed out that there is "political" economics and "real" economics. Real Keynesian economics addresses investment along with consumption. Political Keynesian comes down hard on the consumption side. Now, in real Keynsian it is certainly possible to save too much, especially if those savings aren't invested. A recent model is Japan during the 1990s.

"I have never found a good analysis of the benefits of accumulated savings in terms of risk reduction."

Part of the problem is terminology. To an economist, "savings" include things like increased inventory. And that doesn't have the same economic impact as, say, a bank account where the money is used to fund loans. And that has a different effect than investing in the stock market.
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