Geoffrey Yu provides the most recent of recurrent commentaries on the action of central banks (“Bank of England may have no choice but to join the race to the bottom”, Markets Insight, FT.com, August 16). Many column inches are devoted to the selection of half a dozen or so among myriad potential socio-economic adjustments.

Aggregate demand management has survived way beyond the context that caused J M Keynes to plead with nation states to loosen the real constraints set by sovereign debt and monetary debasement. With liberal democracy threatened from the extremes of both communism and fascism, placing the impoverished unemployed back into work was an overriding concern. Beyond the extremes of the 1930s, both macroeconomic theory and its associated policy recommendations have become empty ritual.

G R Steele
Emeritus Reader of Economics,
Lancaster University Management School, UK

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