Keynesianism (reply to Brad)

[Brad DeLong]

>JMK>>
>>  I do not take this view. I find the explanation of the current
>>  business losses, of the reduction in output, and of the unemployment
>>  which necessarily ensues on this not in the high level of investment
>>  which was proceeding up to the spring of 1929, but in the subsequent
>>  cessation of this investment. I see no hope of a recovery except in a
>>  revival of the high level of investment. And I do not understand how
>>  universal bankruptcy can do any good or bring us nearer to
>>  prosperity...
>
>************
>And "who" caused the said cessation in investment; what caused the 
>saturation of
>investment demand [as if it were as simple as  that :-)], if more is 
>always better?
>
>Ian

"Animal spirits" coupled with too high an ex ante expected 
risk-adjusted real interest rate.

Brad DeLong

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