Keynesians held deficit spending only causes inflation after full employment

Evidence

20 Th is diagnosis of infl ation runs counter to the Keynesian argument developed in the 1930s, by which infl ation is not caused by public defi cit spending per se, but rather emerges when the economy reaches full capacity and demand structurally outstrips supply. Th us, in the Keynesian argument defi cit spending does not provoke infl ation until full employment. — Clara E. Mattei, The Capital Order, 1683

Categorization

• XREF: connects to: Monetarists hold that Keynesian stimulus breeds ever-rising inflation — Mark Blyth, Austerity: The History of a Dangerous…, 410; Keynesian theory holds that idle savings rather than spending retard capital accumulation — Clara E. Mattei, The Capital Order: How Economists…, 1683; Austerity treats citizens’ consumption as the cause of inflation to justify repressing demand — Clara E. Mattei, Escape from Capitalism: An Intervention, 349 (+1 more)

Broader Connections

• 1920s German hyperinflation stemmed from WWI debt financing, not stimulus #exemplifies (0.85) — Mark Blyth, Austerity, 162
• Austerity treats citizens’ consumption as the cause of inflation to justify repressing demand #qualifies (0.75) — Clara E. Mattei, Escape from Capitalism, 349