On Oct 22, 2010, at 9:35 AM, Jim Farmelant wrote:
> And on the other hand, wasn't one of Keynes's arguments
> for expansionary fiscal and monetary policies, the notion
> that such policies would cause price inflation which, since
> wage hikes would lag behind, result in lower real wages
> (as opposed to money wages), thereby encouraging
> businesses to begin hiring workers?
The point was to turn deflation into a mild inflation. The moment the U.S. economy began recovering in 1933 was also the moment when the CPI turned up.