Hayek and Keynes: What Have We Learned?

In 1932, there was an exchange of letters to the Times between a group of Cambridge and Oxford economists, including J. M. Keynes. A group of University of London economists, including F. A. Hayek, responded. It was a public manifestation of the Hayek/Keynes controversies that would roil the economics profession. The Hayek/Keynes debate both repeated 19th century controversies and anticipated differences of theory and policy that spilled into the 21st century. These included the role of saving, public spending, private investment, and budget deficits. The financial crisis and the emergence of large structural deficits make the debate relevant once again.