The ultimate Neo-Keynesian and the ultimate Post-Keynesian are trading blows on their respective blogs right now.
It all started two weeks ago when Steve Keen published claimed that Paul Krugman didn’t understand Hyman Minsky and his warnings about debt. They’ve exchanged half a dozen posts since then, but we’ll skip to the latest insults.
KEEN: Reading what Paul Krugman is saying about banking feels like reading a Ptolemaic Astronomer describing sunrise today as if that’s actually what’s happening. He is dismissive of the view that banks can “create credit out of thin air”—so dismissive in fact, that anyone unacquainted with the empirical evidence might be fooled into believing that his case is so strongly supported by the facts that it’s not even worth the bother of citing the empirical data that backs it up.
KRUGMAN: Oh dear. Nick Row
e sends me to Keen’s latest… Nick uses a four-letter word to describe this; I can’t, because this is the Times.
KEEN: In just a couple of days I’ve gone from the privilege of being acknowledged by Krugman to being misread by him, in a way that would have any student failed in a multiple choice exam. In a passage where I specifically referred to DSGE models–which includes both “New Classicals” and “New Keynesians” he interpreted me as referring to New Keynesian models only…
Since I don’t work for The Times, I can and will use a four letter word to describe your poor comprehension here Paul: FAIL.