Co vid 19 pandemic confirms again the critical relevance of Keynes and his policy tools

March 27 2020 , The current Covid19 crisis and the American and Canadian response to it by both the President and the Congress and the Fed , the Prime Minister, Parliament and the Bank of Canada is once again proof that Keynes is still very relevant and critically important in understanding how to fund countervailing policy to rescue the economy and society when it is attacked by a horrible scourge pandemic that tragically will cost the lives of many thousands or more of people world wide. There no longer is talk of excessive deficit spending, fear of inflation , condemnation of printing money and the whole range of deficit hysteria. Once again its crystal clear that massive disinflation and probable deflation will be the order of the day for awhile. Despite enormous deficit  spending and large bouts of QE which Keynes, Lerner , and Takahashi, called for in the 1930s and John Hotson, Mario  Seccareccia and myself called for more than thirty years ago , most economists and policy analysts will be supportive this time. Despite the barrage of criticism we faced we were correct in arguing for the wisdom of this set of policy tools. We should see a sharp recovery after the spending occurs  and we are able to pass beyond the epidemic and find safe vaccines and treatments. This program will need to be assessed as to how large the expenditure and income replacement needs to be and what needs to be adjusted as it is implemented.

 

About haroldchorneyeconomist

I am Professor of political economy at Concordia university in Montréal, Québec, Canada. I received my B.A.Hons (econ.&poli sci) from the University of Manitoba. I also completed my M.A. degree in economics there. Went on to spend two years at the London School of Economics as a Ph.D. student in economics and then completed my Ph.D. in political economy at the University of Toronto. Was named a John W.Dafoe fellow, a CMHC fellow and a Canada Council fellow. I also was named a Woodrow Wilson fellow in 1968 after completing my first class honours undergraduate degree. Worked as an economist in the area of education, labour economics and as the senior economist with the Manitoba Housing and Renewal Corporation for the Government of Manitoba from 1972 to 1978. I also have worked as an economic consultant for MDT socio-economic consultants and have been consulted on urban planning, health policy, linguistic duality and public sector finance questions by the governments of Manitoba, Saskatchewan,the cities of Regina and Saskatoon, Ontario and the Federal government of Canada. I have also been consulted by senior leaders of the British Labour party, MPs from the Progressive Conservative party, the Liberal party and the New Democrats on economic policy questions. Members of the Government of France under the Presidency of Francois Mitterand discussed my work on public sector deficits. I have also run for elected office at the municipal level. I first began to write about quantitative easing as a useful policy option during the early 1980s.
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