Here is Michael White's article about the event
Matthew Taylor's blog about it
Text version of my speech: Download Keynes.doc
Audio of the event (I'm on from 12 minutes 20 seconds)
A somewhat curious event, really. Each speaker focused on a different aspect of Keynes, none of us responded directly to what other speakers said or thought, and there were few questions at the end. This makes it difficult for me to assess whether I pitched the speech at the right level (never having attended an RSA event before).
I guess I proffered a few fairly contentious propositions:
- That the main reason fiscal policy effects are limited is that people save today to pay taxes tomorrow ("Ricardian equivalence"), and that this is a more important constraint than "crowding out" of investment.
- That sufficient malfunction in credit markets might undermine people's ability to borrow, destroying Ricardian equivalence and making fiscal policy effective.
- That under aggressive deflation with functioning credit markets, although there would not be crowding out there would still be Ricardian equivalence, and so fiscal policy would be no more effective than monetary policy.
- That the window for the use of active fiscal stimulus is therefore narrow, and should be seized, with tax cuts next year of some £30bn.
- That the only true form of fiscal stimulus is a tax cut. Spending rises are simply a way to change the balance of the state in the economy, and hence not about fiscal policy.
- That fiscal policy is likely to become more important in the future as independent central banking is undermined and coordination of fiscal and monetary policy becomes greater.
- That once we are into deflation, the use of price-level targeting and money-printing may be justified.
Unfortunately because of the format, none of the other panellists responded to these directly (though Lord Desai did privately afterwards). Still, an interesting event.
