Thanks for your comments!

Is this the same Greg Mankiw

Yes the same – if you read the whole November NYT op-ed you’ll see that he is making much the same points. That everybody in power learned their economics from the Samuelson and derivatives thereof; we don’t really know if those fiscal policies are appropriate in this crisis; and that the consequences may be worse than the problem we set out to solve. E.g. in closing he wrote:

Fortunately, the Fed has a few secret weapons. It can set a target for longer-term interest rates. It can commit itself to keeping interest rates low for a sustained period. Most important, it can try to manage expectations and assure markets that it will do whatever it takes to avoid prolonged deflation. The Fed’s decision last week to start buying mortgage debt shows its willingness to act creatively.

It is hard to say how successful monetary and fiscal policy will be in avoiding a deep downturn. But as events unfold, you can be sure that policymakers in the Fed and Treasury will be looking at them through a Keynesian lens.

In 1936, Keynes wrote, “Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slave of some defunct economist.” In 2008, no defunct economist is more prominent than Keynes himself.

On your points regarding Samuelson on World War 2 — yes, agreed — though that is really a different topic. One that doesn’t help us much in choosing the best policies to get the global economy back to trend.

On your emphasis of the need for a global response to the global crisis — I couldn’t agree more. This is a perfect opportunity for Obama to prove that he has a special gift for diplomacy. He faces a staggering challenge, because the incentives of many of the key countries are not aligned with America’s. E.g., it is very appealing to the EU to free ride on America’s stimulus spending.

Cheers, Steve

1. Is this the same Greg Mankiw who in November 2008 wrote: “IF you were going to turn to only one economist to understand the problems facing the economy, there is little doubt that the economist would be John Maynard Keynes. Although Keynes died more than a half-century ago, his diagnosis of recessions and depressions remains the foundation of modern macroeconomics. His insights go a long way toward explaining the challenges we now confront.” (See NY Times, November 28, 2008.)

2. In his NY Times article today, Greg Mankiw quotes Samuelson on World War 2 emerging from the Great Depression. This captures a really important but generally neglected aspect of Keynes’s thinking – that there were important economic causes of war and economic means of promoting peace. (See Markwell’s book on Keynes and international relations, and “economic paths to war and peace”.)

3. Why isn’t more attention being paid to the need for international coordination of economic stimulus – a global response to the global crisis? Again, this was an important aspect of Keynes’s thinking. (Markwell’s book covers this also.)