Nobel winning economist Professor Stiglitz is often categorised as a Neo Keynesian. But during this crisis sometimes his language can be a little bit divergent from the stereotypical Keynesese speak. This Bloomberg article features some scathing attack from him about the Keynesian Mecca based at Liberty 33, The Federal Reserve Bank. He blames its artificial excessive low interest rate policy for creating asset bubbles.
Stiglitz Says Fed Rate Policy May Cause Asset Bubbles (Update2) - Bloomberg.comNobel Prize-winning economist Joseph Stiglitz said the Federal Reserve’s policy of cutting interest rates to a record low has had repercussions worldwide, including currency misalignments and the risk of asset price bubbles.
“Fed policy was supposed to reignite the American economy, but it’s not doing that,” Stiglitz, a professor at Columbia University in New York since 2001, said in a Bloomberg Television interview today. “The flood of liquidity is going abroad and causing problems all over the world.”
Mmm, where did we hear that before? Ah yes good old Austrian School economist Friedrich A Hayek back in the 1930s. I wonder did the Stig watch that recent hilarious Keynes V Hayek rap video on You Tube and has seen the light?
Or did the short sharp shock of being publically humiliated by Hugh Hendry live on BBC's Newsnight sober him up and he became enlightened?
What on Earth will Paul "Freddie" Kruggerman make of this? Is he going to convert as well? If so what will the Irish Times on a Saturday feature to wag its preachy finger at us? It can hardly have anti-statist material coming from the saved Krugger, now can it?