> This is a very interesting piece. Many interesting
> issues are raised.
Paul Krugman had a very narrow response, with a very glib title, to Buiter:
<http://krugman.blogs.nytimes.com/2009/01/05/faith-based-macroeconomics/>
There is a possibly telling difference between Willem Buiter and Paul Krugman. Paul Krugman, from his WITBD:
"We will not achieve the understanding we need, however, unless we are willing to think clearly about our problems and to follow those thoughts wherever they lead. Some people say that our economic problems are structural, with no quick cure available; but I believe that the only important structural obstacles to world prosperity are the obsolete doctrines that clutter the minds of men."
<http://www.nybooks.com/articles/22151>
Williem Buiter:
"Given the bad fiscal position of the US Federal government and given the vulnerability of the external position of the US and its growing reliance on foreign funding, the scope for expansionary fiscal policy in the US is much more limited than president-elect Obama’s advisers appear to realise. Underneath the effective demand problem is a deep structural rot, especially in household sector and financial sector balance sheets. Keynesian cyclical policy options that would be open to more structurally sound economies should therefore not be tried on anything like the same scale by the US authorities."
<http://blogs.ft.com/maverecon/2009/01/can-the-us-economy-afford-a-keynesian-stimulus/>
Shane