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Old 05-08-2013, 02:06 PM   #8
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Join Date: Apr 2008
Location: Mid-Atlantic
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The core insight of Keynesian economics is that there are very special economic circumstances in which the general rules of economics donít apply and are, in fact, counterproductive.

This happens when interest rates and inflation are so low that there is no essential difference between money and bonds; money, after all, is simply a bond that pays no interest. When this happens, monetary policy becomes impotent; an increase in the money supply has no stimulative effect because it does not lead to additional spending by consumers or businesses.
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