On the subject of the Eurozone, I read some calls today for Germany to leave the EMU (rather than Spain or Greece or whoever). Since German CBers are liquidationists, and since Germany plays the same role for the Mediterranean states that China plays for America—running large surpluses within the EMU that can’t be adjusted for because of the exchange rate peg—the Germans should step outside where they could engage in these practices without causing as much harm.
That's probably a good idea. Unfortunately, if what I'm seeing on the BBC right now is correct, Greece, Portugal, etc. are actually going the fiscal austerity route. Bad idea. They're going to end up like Latvia.
One interesting / slightly weird aspect of NK is that it makes sticky prices and wages the cause of fluctuations in output and thus unemployment. This is pretty much the opposite of what Keynes wrote in the General Theory, IIRC.
Yeah, those accommodations to New Classical econ is why people call it "New Consensus" instead of "New Keynesian". The basic genealogy is this: Keynes was crossed with classical to make the neo-classical synthesis, then the neo-classical synthesiss was crossed again with hardcore New Classical to give us New Keynesianism. By that point, a lot of the Keynes had been 'bred' out of it.
Another QE related thought: I've heard Mosler saying that insofar as QE/CE brings down long rates, its effects on aggregate are uncertain, because although borrowers get lower rates, savers get reduced income (so the profit that the Fed makes on its investment portfolio is reducing AD because its interest income or capital gains lost to the private sector--effectively a stealth tax). The private sector's position WRT net lending or borrowing would also come into play, I guess, as well as distributional issues.
Not sure I'm following entirely, but aren't savers more likely to save that interest income? Isn't the Fed just shifting that income over to borrowers who have a higher MPC, increasing AD? I don't get a lot of Moslers stuff... it seems odd to me.