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- | Welcome to another in a series | 0:02 |
of commentaries on the current economic scene | 0:03 | |
produced and recorded | 0:05 | |
by Instructional Dynamics Incorporated. | 0:07 | |
Our guest again this week, | 0:09 | |
the week of February 3rd, is Dr. Paul Samuelson, | 0:10 | |
Professor of Economics | 0:14 | |
at the Massachusetts Institute of Technology. | 0:15 | |
Professor Samuelson, what's on the top of the list | 0:18 | |
for this week? | 0:21 | |
- | For this first week of February, | 0:21 |
there're really many exciting things to talk about, | 0:23 | |
almost too many. | 0:26 | |
The new team in Washington | 0:28 | |
has started out in a very low-keyed way | 0:30 | |
so that I think we have no new clues | 0:32 | |
as to what the tone of the economy is likely to be | 0:35 | |
in 1969 coming out yet from Washington. | 0:38 | |
It is necessarily still the same old guessing game. | 0:43 | |
Will the 4% inflation of 1968 be tamed down | 0:47 | |
in 1969 towards a 3% rate? | 0:52 | |
Will the end of 1969 be on an upbeat? | 0:56 | |
Or is the first half of the year | 1:01 | |
to be the period of greatest exuberance | 1:03 | |
as by next Labor Day we begin to feel the pinch | 1:07 | |
of Federal Reserve tightening | 1:10 | |
that is going on today? | 1:13 | |
Let me first touch on the most current bits | 1:16 | |
of information that are coming in each day. | 1:19 | |
Then as time permits, | 1:23 | |
I'd like to go into some deeper analysis | 1:25 | |
of the forces shaping our economic destiny this year | 1:27 | |
and in the future. | 1:31 | |
Point number one I think | 1:33 | |
is the fact that the Fed | 1:36 | |
does seem to be putting on the screws. | 1:38 | |
At the end of January, net free reserves | 1:42 | |
had reached the record negative level | 1:44 | |
of 758 million. | 1:48 | |
That is net borrowed reserves of 758 million. | 1:51 | |
The total of discount borrowings after we subtract | 1:55 | |
from them the small amount of excess reserves | 2:01 | |
of the banks came to about 3/4 of a billion | 2:05 | |
and this is a 16-year record. | 2:09 | |
Now, net free reserves | 2:12 | |
is only one of many indicators | 2:15 | |
and cannot be relied on by itself | 2:17 | |
to tell us what is happening in the money markets | 2:21 | |
but it is one very important straw in the winds. | 2:24 | |
One Friday's report doesn't define a deflationary epoch | 2:27 | |
but the most recent acts | 2:33 | |
are in line with what most experts | 2:35 | |
have been expecting from the Federal Reserve. | 2:38 | |
The tightening action of the Federal Reserve | 2:42 | |
has shown itself in a number of effects. | 2:44 | |
Interest yields are again trending upward, | 2:48 | |
bond prices falling. | 2:52 | |
Lowered expansion in business in January | 2:56 | |
seems to have been down even after seasonal corrections. | 2:58 | |
The money supply has probably declined | 3:03 | |
for a couple of weeks | 3:06 | |
and perhaps will not be up much | 3:07 | |
for the months of January and February. | 3:09 | |
These acts of the Fed fit in well | 3:13 | |
with what a number of the Reserve authorities | 3:15 | |
have been saying. | 3:17 | |
Some of you may have read a U.S. News | 3:19 | |
& World Report interview | 3:21 | |
with Governor George Mitchell of the Federal Reserve | 3:23 | |
a few weeks ago | 3:25 | |
in which he spoke of the Fed's determination | 3:27 | |
to curb inflationary expectations. | 3:30 | |
Some will write this off as Madison Avenue propagandizing | 3:33 | |
in which the Federal Reserve says one thing | 3:37 | |
and does another but not I. | 3:40 | |
To predict what is going to happen to the money supply | 3:43 | |
and credit conditions in the future, | 3:46 | |
I find it useful to monitor very closely | 3:48 | |
all the indications of attitude | 3:51 | |
that I can get on the part of those | 3:53 | |
who do the voting in the Open Market Committee | 3:55 | |
of the Federal Reserve. | 3:57 | |
The fact that George Mitchell is a Kennedy appointee | 3:59 | |
with a historic record of favoring full employment policies | 4:02 | |
gives his words I think particular significance. | 4:06 | |
I should also call to your attention | 4:10 | |
recent speeches by Andrew Brimmer | 4:12 | |
of the Federal Reserve Board. | 4:14 | |
Governor Brimmer is an able economist | 4:17 | |
and he happens also to be black. | 4:20 | |
His concern with the problem of unemployment | 4:22 | |
among ghetto youth | 4:25 | |
needs no documentation nor explanation. | 4:26 | |
As a Johnson appointee to the Board, | 4:30 | |
Brimmer has been an articulate activist | 4:34 | |
on the liberal side. | 4:36 | |
It is therefore I think of especial significance | 4:39 | |
when Brimmer states that controlling inflation | 4:42 | |
is in the long-run interest of the black community | 4:45 | |
even if it means some increase in ghetto unemployment | 4:48 | |
in the short run. | 4:52 | |
When President Alfred Hayes | 4:54 | |
of the New York Federal Reserve Bank says things like this, | 4:56 | |
that's not news. | 4:59 | |
Hayes is a fine Yale gentleman, | 5:02 | |
a Rhodes Scholar and a pillar | 5:04 | |
of the New York financial community. | 5:05 | |
Hayes has been saying things like that | 5:08 | |
for a long time | 5:09 | |
but when Brimmer and Mitchell begin to say things like that, | 5:11 | |
it suggests to me | 5:16 | |
that an agonizing reappraisal is going on | 5:18 | |
within the former majority | 5:21 | |
of the Federal Reserve Board, | 5:24 | |
the former majority which was prepared | 5:26 | |
to make considerable sacrifices | 5:28 | |
on the side of price instability | 5:31 | |
in return for high employment. | 5:34 | |
I believe we're getting a gradual shift | 5:39 | |
in the position of the majority | 5:43 | |
and I believe this has significance for the future. | 5:47 | |
I happen to be a week or so ago | 5:52 | |
at a meeting of academic experts | 5:55 | |
who were called for the purpose | 6:02 | |
of giving advice on macroeconomic policy. | 6:04 | |
This was a completely off-the-record session. | 6:08 | |
I discovered to my surprise | 6:14 | |
that among most of the experts there, | 6:17 | |
I was one of the, or seemed to be, | 6:19 | |
one of the greatest activists | 6:24 | |
for Federal Reserve tightness. | 6:25 | |
Now, that perhaps is news | 6:29 | |
because it's a rare session of that type | 6:31 | |
when I'm not to be found on the side of the angels | 6:35 | |
who put great stress upon vigorous real growth | 6:39 | |
and high immediate short-run employment. | 6:44 | |
Let me review that session | 6:53 | |
and some of the arguments that were given. | 6:58 | |
On the one hand, | 7:01 | |
there were monetarists there | 7:02 | |
who have believed right along | 7:04 | |
that the rate of growth | 7:07 | |
of the money supply has been excessive | 7:08 | |
but who are very distrustful | 7:10 | |
of correcting an excess of the rate of growth | 7:14 | |
of the money supply in one period | 7:18 | |
by a subsequent defect | 7:19 | |
or deficit or shortcoming or shortfall | 7:24 | |
in the rate of growth of the money supply. | 7:28 | |
And a typical representative of that group | 7:30 | |
would counsel the Fed | 7:33 | |
to tighten up in comparison to what it has been doing. | 7:35 | |
This as measured by the monistic measure | 7:40 | |
of the rate of growth of the money supply. | 7:45 | |
But to do is very gradually | 7:47 | |
and to do it in not necessarily in one immediate step. | 7:49 | |
Just to use some numbers at random, | 7:55 | |
and I don't want to pin myself down precisely | 7:59 | |
as to which definition of the money supply I'm using, | 8:02 | |
let's suppose that a magnitude which in the long run | 8:06 | |
is thought by this school properly | 8:10 | |
to be at about 5% per annum | 8:12 | |
has been running at nine or 10% per annum | 8:16 | |
for many, many months. | 8:21 | |
The exponents of this view | 8:23 | |
would say we'll go from nine or 10% | 8:25 | |
down to seven or 8% in one stage | 8:28 | |
and then go in another stage from seven or 8% | 8:32 | |
down to 5%. | 8:37 | |
But don't repeat, don't go from 10 to 9% | 8:38 | |
in one period of time, in a short period of time | 8:45 | |
to below 5% | 8:48 | |
in the thought that you atone | 8:52 | |
in a later period for the sins | 8:55 | |
and indulgences of an earlier period. | 8:57 | |
That was one group | 9:01 | |
and I would say that the counsel of that group | 9:03 | |
would be to cool off any new converts | 9:07 | |
towards activism against inflation | 9:10 | |
within the Federal Reserve system. | 9:13 | |
Perhaps an even larger group, | 9:17 | |
the majority group in the country at large | 9:19 | |
accepts the still fashionable view | 9:25 | |
that the first half of 1969 is likely to be the weakest half | 9:28 | |
and is likely to see real rates of growth | 9:34 | |
that average not much different | 9:38 | |
from $10 billion per quarter | 9:40 | |
in each of the first two quarters | 9:43 | |
and then who expect some increase | 9:45 | |
in the last couple of quarters. | 9:48 | |
This particular group gives ranges of estimates | 9:51 | |
very much like those | 9:56 | |
of the National Industrial Conference Board Panel | 9:57 | |
that Paul McCracken and others were on | 10:01 | |
meeting at the end of last year | 10:03 | |
which has been mentioned in this tape | 10:06 | |
and which if time permits I would like | 10:09 | |
from a methodological view to comment on in greater detail | 10:11 | |
a little bit later. | 10:15 | |
Well, according to this group, | 10:17 | |
the economy is going to do some cooling off | 10:19 | |
on it's own account | 10:23 | |
and therefore they tell the Federal Reserve | 10:24 | |
to tighten but be careful | 10:27 | |
that you don't indulge in overkill. | 10:30 | |
Now, as against these two groups, | 10:35 | |
I seem to be in favor of greater activism. | 10:37 | |
How can I explain that? | 10:40 | |
One, I take it as basic as the axiom for the discussion | 10:43 | |
that the authorities in question | 10:47 | |
are prepared to have unemployment go up some. | 10:50 | |
Now, I don't mean go up a lot, | 10:54 | |
but to go up from the last figure | 10:56 | |
that I have seen of 3.3% | 10:58 | |
to let's say 4% as an investment | 11:01 | |
in bringing the rate of inflation down | 11:05 | |
from 4% to 3.5 or 3 and 1/3%. | 11:07 | |
I don't say that my own value judgments necessarily | 11:14 | |
endorse this axiom 100% | 11:17 | |
but as an expert called in, | 11:19 | |
I take that to be the axiom of the client | 11:22 | |
and I proceed on that particular basis | 11:24 | |
and I think that most of the people there | 11:27 | |
would not in fact quarrel with that axiom. | 11:29 | |
Now, I don't think that if the Fed does things | 11:34 | |
in a very moderate way, | 11:38 | |
you're gonna get any short-term moderation | 11:41 | |
and I believe that monetary policy can do something | 11:46 | |
in the short run. | 11:49 | |
If I could coin a phrase, | 11:51 | |
there is a widespread belief | 11:54 | |
in fine distuning. | 11:57 | |
There's the belief that if you let | 12:02 | |
the money supply fluctuate | 12:03 | |
a little bit, that you greatly de-stabilize the economy. | 12:05 | |
I don't believe in that theory | 12:09 | |
of fine distuning. | 12:11 | |
As I read the evidence, the rate of growth | 12:14 | |
of the money supply | 12:17 | |
can be a very choppy time series | 12:18 | |
but everything in neoclassical | 12:21 | |
and post-Keynesian economic theory argues | 12:23 | |
in my view towards the proposition | 12:27 | |
that it's the rate of change of the money supply | 12:31 | |
over a considerable period of time, | 12:34 | |
what you might call its permanent component | 12:36 | |
which is important | 12:39 | |
and the system has great capacity | 12:40 | |
to ride with and cushion fluctuations | 12:44 | |
in the rate of growth of the money supply. | 12:49 | |
Let me put it concretely | 12:51 | |
and I'll overstate my case a little bit | 12:52 | |
just in order to make the analytical argument very clear. | 12:54 | |
I believe that if over a period of a year or two years, | 12:58 | |
5% happens to about the right rate | 13:03 | |
of growth of the money supply, | 13:08 | |
from the beginning of that period | 13:10 | |
to the end of that period, | 13:11 | |
that if you have gone in the first third | 13:13 | |
of that period | 13:17 | |
at an excessive rate, | 13:21 | |
then it is good business to go in the next third | 13:22 | |
of the period at a deficit rate | 13:25 | |
averaging out to about the right figure | 13:31 | |
and I think the system is very well adapted | 13:33 | |
to react properly to that kind of action. | 13:36 | |
Let me give some dramatic language | 13:41 | |
not to convince you of my point | 13:44 | |
and not to demonstrate my point | 13:48 | |
and not to prove that I'm right in my point | 13:50 | |
but for the purpose of clarifying | 13:54 | |
what my point is. | 13:56 | |
I do not believe | 14:01 | |
that when you run the rate of growth of the money supply | 14:03 | |
at 9% for a period of time | 14:06 | |
when it should be run at 5%, | 14:09 | |
I have no quarrel at the moment with that 5% figure, | 14:11 | |
that that can be likened | 14:14 | |
to a truck which runs over a pedestrian | 14:17 | |
and does him great harm. | 14:22 | |
But suppose I did believe that. | 14:25 | |
Let us suppose that this incident | 14:30 | |
is now followed by a period | 14:32 | |
in which you have the rate of growth of the money supply | 14:34 | |
growing by only one or 2%, | 14:36 | |
a shortfall from the 5%. | 14:40 | |
I don't believe that that act | 14:43 | |
can be then likened | 14:45 | |
to running the Mac truck backward over the patient, | 14:48 | |
over the pedestrian, | 14:52 | |
killing him twice or breaking the other bones | 14:54 | |
in his body that you missed breaking | 14:57 | |
by your first misdemeanor and felony. | 14:59 | |
On the contrary, I think that one act | 15:02 | |
tends to wash out the other. | 15:05 | |
The homely illustration that I give | 15:07 | |
comes from the fact that a number | 15:09 | |
of my children are very keen and expert sailors | 15:12 | |
and they tell me that if you wanna head due north, | 15:15 | |
and if the wind is coming from the north, | 15:19 | |
do not despair, | 15:21 | |
that you tack to the north east | 15:23 | |
and you go along that tack | 15:26 | |
for quite a while, of course, | 15:27 | |
meriting or at least getting the severe criticism | 15:30 | |
of those who say you should be going due north | 15:35 | |
and then after you've gone quite a while north east, | 15:38 | |
you take the other tack | 15:42 | |
which is north west | 15:44 | |
and you end up about where you ought to be | 15:45 | |
and you end up in an optimal way | 15:49 | |
in that fashion. | 15:52 | |
Now, I'm not going to argue | 15:53 | |
that the optimal always calls for attacking | 15:55 | |
that the wind is always against you | 15:59 | |
and that you must always move in a bang, bang way | 16:02 | |
but I come from MIT | 16:06 | |
where there are lots of experts | 16:09 | |
in cerebral mechanisms | 16:10 | |
and one of the most efficient types | 16:12 | |
of cerebral mechanisms, | 16:15 | |
in fact, it's used more than any other system | 16:16 | |
in the world today, we use it in our refrigerators, | 16:19 | |
we use it in our homes is the bang-bang method | 16:22 | |
of optimal control, | 16:25 | |
namely when our thermometers goes below | 16:27 | |
a certain figure, | 16:30 | |
our heating systems go on, | 16:32 | |
it's a question of off and on. | 16:35 | |
And when the temperature now rises | 16:37 | |
a certain amount above the goal level, | 16:41 | |
the bang-bang mechanism goes off, | 16:45 | |
it is again a case of tacking. | 16:48 | |
Now, it's true that if I were designing | 16:50 | |
a big airplane and if I have lots | 16:52 | |
of possibilities for an optimal synthesis, | 16:55 | |
I may prefer to a sledgehammer bang-bang approach | 16:58 | |
a more gradual approach | 17:04 | |
and in fact I do favor a more gradual approach. | 17:05 | |
You know leaving all metaphors aside | 17:09 | |
that my more gradual approach in this matter | 17:11 | |
is to have monetary policy lean | 17:14 | |
against the wind as best we can predict | 17:17 | |
where the wind will be in the future | 17:21 | |
after that period of lag | 17:24 | |
when monetary policy takes its effect | 17:26 | |
and I do not believe on the basis | 17:28 | |
of the studies that I have seen | 17:30 | |
that one must be an agnostic in thinking | 17:33 | |
that such a prediction is possible | 17:36 | |
and that following such a philosophy | 17:39 | |
will do more harm than good. | 17:42 | |
In a nutshell then, | 17:46 | |
I think that after we have had too much inflation, | 17:48 | |
and too increase increase in the money supply | 17:55 | |
by the Federal Reserve, | 17:58 | |
we should have its opposite. | 17:59 | |
Now, I can advise this on the Federal Reserve | 18:02 | |
with better conscience | 18:06 | |
because my full philosophy | 18:08 | |
is that the Federal Reserve does not now have | 18:11 | |
to decide what it will do for the next six months, | 18:13 | |
some of the experts who presume | 18:16 | |
to advise the Federal Reserve | 18:19 | |
talk of the following terms, | 18:22 | |
they say you should have at any one time | 18:23 | |
a definite policy. | 18:26 | |
That policy should be in season for a long time. | 18:29 | |
When I counsel you what to do, | 18:32 | |
I say to myself, | 18:35 | |
what should you be doing for the next six months? | 18:37 | |
Because you are stuck with that policy. | 18:39 | |
That isn't at all the view that I take | 18:41 | |
as an adviser. | 18:44 | |
My view is that the Federal Reserve | 18:45 | |
should be tacking, it should be changing its course often | 18:46 | |
as the best indications of the future winds come in | 18:51 | |
and therefore if I'm wrong | 18:57 | |
and if following my advice | 18:59 | |
and having the money supply level off | 19:01 | |
or growing at only 1% for a while, | 19:04 | |
should turn out to give some indications | 19:08 | |
of trouble in the future, | 19:12 | |
I don't think the Federal Reserve should hold | 19:14 | |
on to that course. | 19:15 | |
I'm as near as the nearest telephone. | 19:18 | |
I am perfectly prepared | 19:20 | |
to tell them to ease up. | 19:23 | |
It's again, to use analogies | 19:25 | |
for the purpose of clarifying the position | 19:27 | |
and not for the purpose of persuading, | 19:29 | |
it's like playing a fish. | 19:31 | |
You give him some line, | 19:34 | |
and then you reel in a line | 19:36 | |
whereas if somebody tells you the only way | 19:40 | |
to catch a fish, a large fish | 19:42 | |
and with a weak line is just a steady pressure, | 19:45 | |
that's of course in the case of fishing nonsense. | 19:48 | |
Well, for reasons that have nothing | 19:52 | |
to do with fishing, I think that that is not good policy | 19:54 | |
in the field of monetary policy. | 19:57 | |
- | Professor Samuelson, earlier you mentioned | 20:02 |
that you were gonna make some methodological comments | 20:04 | |
about the kind of forecast the Conference Board put out | 20:07 | |
at the end of last year. | 20:10 | |
Would you like to do that right now? | 20:12 | |
- | I think, I'll pass up that opportunity. | 20:14 |
There will be plenty of time | 20:17 | |
to go into those matters. | 20:19 | |
I'd like to spend some more minutes | 20:22 | |
on evaluating as objectively as I can | 20:26 | |
certain aspects of monetarism | 20:31 | |
by which I mean only a view | 20:35 | |
that the primary macroeconomic variable | 20:38 | |
to watch for the purpose of predicting | 20:44 | |
and controlling aggregate demand | 20:48 | |
in the period of a year or two ahead | 20:52 | |
is the money supply | 20:56 | |
and its rate of growth | 20:58 | |
with definitely secondary emphasis | 21:00 | |
to be placed upon fiscal policy variables | 21:04 | |
like changes in tax rates | 21:07 | |
or changes in expenditure. | 21:09 | |
I've just been reading an interesting article | 21:19 | |
on monetarism that my colleague, Robert Solow of MIT | 21:21 | |
has written for The London Times. | 21:26 | |
Professor Solow is a very eminent economist | 21:29 | |
in many fields | 21:33 | |
and he's this year the Visiting Eastman Professor | 21:34 | |
at Balliol College in Oxford. | 21:36 | |
And so, he naturally has a special interest | 21:39 | |
in the debate that has been going on in England | 21:41 | |
over whether the rate of growth of the money supply | 21:44 | |
is a trivial variable | 21:47 | |
or is the all-important variable | 21:49 | |
that macroeconomic policy should concentrate on. | 21:52 | |
As I mentioned in an earlier tape, | 21:57 | |
for a long time many British experts poo pooed | 21:59 | |
the role of money. | 22:03 | |
Actually concluding in the infamous | 22:04 | |
official Radcliffe Report | 22:06 | |
in effect that money does not matter. | 22:09 | |
Now, a number of us have been trying | 22:12 | |
to convert these experts back to commonsense. | 22:13 | |
In particular Harry Johnson | 22:17 | |
who was originally a Canadian | 22:20 | |
but who now holds the Chair | 22:22 | |
at the London School of Economics part of the year | 22:24 | |
and the Chair at the University of Chicago | 22:27 | |
the other part of the year | 22:28 | |
has written an article | 22:31 | |
in The Times earlier in November I believe | 22:34 | |
in which he chastised the British economists | 22:40 | |
for not believing in monetarism | 22:45 | |
and Professor Solow is taking a more eclectic position | 22:48 | |
in which he is scolding the English economists | 22:53 | |
for being so doctrinairism thinking earlier | 22:57 | |
that money did not matter | 23:00 | |
and he's also scolding them | 23:01 | |
for having accumulated | 23:03 | |
so little evidence on the subject | 23:04 | |
but he is awarding them | 23:06 | |
I guess swallowing a simplest version of monetarism. | 23:09 | |
Now, I won't go into his particular arguments | 23:16 | |
because I think they overlap | 23:21 | |
with some things that I wrote | 23:23 | |
for the British in The Sunday Telegraph | 23:25 | |
and which I've mentioned in earlier tapes | 23:31 | |
but I'd like to go into some new material | 23:33 | |
that I find in his article. | 23:36 | |
First, there's a chart | 23:40 | |
which shows from 1956 on | 23:43 | |
the behavior of the money supply in Britain | 23:48 | |
and the behavior of the Gross National Product. | 23:52 | |
And to my surprise, | 23:55 | |
the trend of the rate of growth of the money supply | 23:58 | |
in England is quite a smooth one. | 24:02 | |
Now, I don't think it would in every period conform | 24:06 | |
to the Joint Committee's stipulation | 24:09 | |
that it always be between 2% | 24:12 | |
and five or 6% | 24:16 | |
but I think over any year's period, | 24:19 | |
it would be quite smooth. | 24:23 | |
So, looking at this chart, | 24:25 | |
we have almost a laboratory experiment | 24:28 | |
to see how monetarism might work out. | 24:32 | |
It's interesting by the way | 24:36 | |
that it's only a smooth trend | 24:37 | |
but it's a smooth trend | 24:39 | |
at what one supposes is about it's right rate | 24:40 | |
because there's a chart of the rate of real growth | 24:45 | |
of the British GNP | 24:48 | |
and the two curves just hug each other | 24:51 | |
and go along in parallel. | 24:54 | |
You might think then that everything that was proper | 24:57 | |
in a macroeconomic field was done in Britain | 25:00 | |
and what's all the shooting about? | 25:03 | |
Well, we know that the British economy | 25:05 | |
has had a very unsatisfactory performance | 25:07 | |
on many counts | 25:09 | |
and the third diagram chart | 25:11 | |
shows that the rate of growth of the actual GNP | 25:18 | |
in money terms, not its real growth | 25:22 | |
was quite inflationary. | 25:24 | |
So, we have here a simplest demonstration | 25:28 | |
that just controlling the rate of growth | 25:32 | |
of the money supply | 25:35 | |
as your primary macroeconomic variable | 25:36 | |
is not conducive to controlling inflation | 25:40 | |
in the British case. | 25:46 | |
Finally, since my time is almost up, | 25:50 | |
I will quote from Professor Solo | 25:52 | |
who refers to the only test | 25:56 | |
that he has seen for the United Kingdom | 25:59 | |
of the role of the money supply | 26:02 | |
and it is by no means so favorable | 26:05 | |
to the money supply. | 26:08 | |
Quote it was done C.R. Barret | 26:11 | |
and Professor A.A. Walters then | 26:14 | |
of the University of Birmingham | 26:16 | |
who were aware of the difficulties | 26:18 | |
I've just been raising. | 26:19 | |
Even so, they give the pound to the money supply | 26:22 | |
only before the First World War. | 26:25 | |
The simple Keynesian approach | 26:28 | |
which I may say I myself do not advocate, | 26:30 | |
this is not Solow speaking, | 26:34 | |
Samuelson speaking, wins out in the inter-war period | 26:36 | |
and it does slightly better | 26:40 | |
after the Second World War period. | 26:42 | |
Well, I don't think that such tests | 26:45 | |
are worth very much | 26:49 | |
'cause I don't think you can settle these | 26:50 | |
by simple tests | 26:52 | |
as to which of them by itself did better. | 26:55 | |
I believe that you have to mix the two together | 26:58 | |
and an eclectic position | 27:01 | |
is the best one, you've heard that before from me | 27:04 | |
and as I sign off, | 27:07 | |
I make the prediction that you'll hear it again | 27:09 | |
from me in the future. | 27:12 | |
- | Thank you for Professor Paul Samuelson of MIT. | 27:13 |
If you have questions, comments or suggestions, | 27:17 | |
write Instructional Dynamics Incorporated, | 27:19 | |
166 East Superior Street, Chicago, 60611. | 27:22 |
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