Monetary Accommodation Is a Myth, Says Critic of Friedman and Keynes

In a recent commentary, the writer challenges the conventional belief that central banks can stimulate the economy by altering the money supply, labeling the concept of "monetary accommodation" as a myth. He argues that governments possess no resources beyond what they can tax from productive activity, so fiscal spending cannot generate growth but merely follows it. According to the author, GDP rises with government outlays because those expenditures are counted after production has occurred, leading to double-counting.

He further maintains that money in circulation is a by-product of real output, not a tool that policymakers can wield to create demand. The article also suggests that Milton Friedman’s monetarist ideas essentially mirror Keynesian principles, despite popular portrayals to the contrary.