Until we entered the Great Recession, most economists regarded Keynesian economics as a relic of the past. You could still find it discussed in some introductory textbooks. But, as University of Chicago economist John Cochrane points out, it wasnt on the syllabus in any of the leading graduate schools.
Then came the most serious downturn since the Great Depression and something living economists had never seen before: interest rates that were near zero and in some cases negative. Keynes himself speculated that the economy could become stuck in a liquidity trapwhere monetary policy is ineffective and only fiscal policy can stimulate the economy. Could that concept apply to the experience in recent years of the United States, Europe and Japan?
Enter Paul Krugman, the nations leading proponent of orthodox Keynesianism. Krugman is a true reactionary. His explanation of Keynesianism is no different than the way introductory textbooks described it 50 years ago. And since he is a good writer, you would expect his columns in the New York Times to reflect a clearly presented exposition of the theory.