“Keynes's idea was very simple. Monetary and fiscal policy should have a single goal, jointly pursued, of maintaining a full employment level aggregate demand.”

— Robert Skidelsky

Source: John Maynard Keynes: The Return of the Master (2009), Ch. 8 : Keynes for Today

Adopted from Wikiquote. Last update June 3, 2021. History

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Robert Skidelsky 12

Economist and author 1939

Lawrence Klein (1920–2013) American economist

"Keynsianism Again: Interview with Lawrence Klein", Challenge (May-June 2001)

“I refuse to start from the assumption that the role of monetary policy is to control and stabilize inflation. The only acceptable way to start is, I believe, to think of the goal of monetary policy, together with fiscal policy,as the maximization of welfare.”

Olivier Blanchard (1948) French economist

" Monetary Policy; Science or Art? https://economics.mit.edu/files/742" (2006)

“Monetary policy affects the … of goods and assets and (iii) effects through changes in explicit or implicit real interest rates on aggregate demand.”

Rudiger Dornbusch (1942–2002) German economist

Source: Open economy macroeconomics, 1980, p. 71

“The historic terrain of macro-economic theory is the explanation of the levels and fluctuations of overall economic activity. Macro-economists have been especially interested in the effects of alternative fiscal, financial, and monetary policies.”

James Tobin (1918–2002) American economist

Source: "Money and Finance in the Macro-Economic Process" (1982), p. 12

“Economic and monetary union…is incompatible with independent sovereign states with control over their own fiscal and monetary policies. It would be impossible…to have irrevocably fixed exchange rates while individual countries retained independent monetary policies…such a system could never have the credibility necessary to persuade the market that there was no risk of realignment. Thus EMU inevitably implies a single European currency, with monetary decisions…taken not by national Governments and/or central banks, but by a European Central Bank. Nor would individual countries be able to retain responsibility for fiscal policy. With a single European monetary policy there would need to be central control over the size of budget deficits and, particularly, over their financing. New European institutions would be required, to determine overall Community fiscal policy and agree the distribution of deficits between individual Member States…It is clear that Economic and Monetary Union implies nothing less than European Government…and political union: the United States of Europe. That is simply not on the agenda now, nor will it be for the forseeable future.”

Nigel Lawson (1932) British Conservative politician and journalist

Speech to the Royal Institute for International Affairs, Chatham House (25 January 1989), quoted in The View from No. 11: Memoirs of a Tory Radical (London: Bantam, 1992), p. 910.

“We shall talk as if the objective of internal balance were simply that of maintaining a level of total demand for all the country’s products sufficiently high to maintain full employment, but not so high as to lead to a continuing inflation of money prices and costs.”

James Meade (1907–1995) British economist

Source: The balance of payments, 1951, p. 106; As cited in: Metaxas & Weber (2013, p. 20)

“According to [the general equilibrium approach to monetary theory], the principal way in which financial policies and events affect aggregate demand is by changing the valuations of physical assets relative to their replacement costs.”

James Tobin (1918–2002) American economist

Source: "A general equilibrium approach to monetary theory" (1969), p. 29 As cited in: William Pool. Brookings Papers on Economic Activity, 2, (1976), p. 292

“People say monetary policy is easy and quick to implement. It can even be done overnight on the telephone, they say fiscal policy drags out in political and congressional debate in our country. It might take months to implement. But the point is that once fiscal policy is implemented, it might go to work much faster than monetary policy.”

Lawrence Klein (1920–2013) American economist

"Keynsianism Again: Interview with Lawrence Klein", Challenge (May-June 2001)

“Though we have achieved considerable success in our policy of increasing production and maintaining full employment, this has been accompanied by constant pressure for higher wages resulting in higher prices. We have not yet found out how we can maintain full employment in combination with stable or decreasing costs and prices.”

Stafford Cripps (1889–1952) British politician

Memorandum, 'The Dollar Situation: Forthcoming Discussions with U.S.A. and Canada' (4 July 1949), quoted in Correlli Barnett, The Lost Victory: British Dreams, British Realities: 1945–1950 (London: Pan, 1996), p. 353
Chancellor of the Exchequer

“The central idea is that government fiscal policy, its spending and taxing, its borrowing and repayment of loans, its issue of new money and withdrawal of money, shall be undertaken with an eye only to the results of these actions on the economy and not to any established traditional doctrine what is sound and what is unsound …Government should adjust its rates of expenditure and taxation such that total spending is neither more or less than that which is sufficient to purchase the full employment level of output at current prices. If this means there is deficit, greater borrowing, "printing money," etc., then these things in themselves are neither good or bad, they are simply the means to the desired ends of full employment and price stability.”

Abba Lerner (1903–1982) American economist

On Functional Finance: (1943, pg.354) http://papers.ssrn.com/sol3/papers.cfm?abstract_id=174849

“Keynes's idea was very simple. Monetary and fiscal policy should have a single goal, jointly pursued, of maintaining a full employment level aggregate demand.”

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